GST – GST FAQ 3rd Edition – December, 2018 – 04 – 4. Meaning and Scope of Supply Q 1. What is the taxable event under GST? Ans. The taxable event under GST shall be the supply of goods or services or both made for consideration in the course or furtherance of business. The taxable events under the existing indirect tax laws such as manufacture, sale, or provision of services shall stand subsumed in the taxable event known as supply . Q 2. What is the scope of supply under the GST law? Ans. The term supply is wide in its import covers all forms of supply of goods or services or both that includes sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. It also includes import of service. The GST law also provides for including certain transactions made without consideration within the scope of supply. Q 3. What is a taxable supply? Ans. A taxable supply means a supply of good
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
no.4 are not satisfied, it shall still be treated as supply for levy of GST. Q 6. Import of Goods is conspicuous by its absence in Section 7. Why? Ans. Import of goods is dealt separately under the Customs Act, 1962, wherein IGST and compensation cess (wherever applicable) shall be levied under the Customs Tariff Act, 1975 in addition to basic customs duty. Proviso to section 5(1) of IGST Act, 2017 may be referred to. Q 7. Are self-supplies taxable under GST? Ans. Inter-state self-supplies such as stock transfers, branch transfers or consignment sales shall be taxable under IGST even though such transactions may not involve payment of consideration. Every supplier is liable to register under the GST law in the State or Union territory from where he makes a taxable supply of goods or services or both in terms of Section 22 of the CGST Act. However, intra-state self-supplies are not taxable subject to not opting for registration as business vertical. Q 8. Whether transfer of title and/o
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
e Govt. or any local authority in which they are engaged as public authority shall also be construed as business. From the above, it may be noted that any activity undertaken included in the definition for furtherance or promoting of a business could constitute a supply under GST law. Q 10. An individual buys a car for personal use and after a year sells it to a car dealer. Will the transaction be a supply in terms of CGST/SGST Act? Give reasons for the answer. Ans. No, because the sale of old and used car by an individual is not in the course or furtherance of business and hence does not constitute supply. Q 11. A dealer of air-conditioners permanently transfers an air conditioner from his stock in trade, for personal use at his residence. Will the transaction constitute a supply? Ans. Yes. As per Sl. No.1 of Schedule-I, permanent transfer or disposal of business assets where input tax credit has been availed on such assets shall constitute a supply under GST even where no considerati
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ated as supply of goods or supply of service? Why? Ans. Transfer of right to use goods shall be treated as supply of service because there is no transfer of title in such supplies. Such transactions are specifically treated as supply of service in Schedule-II of CGST/SGST Act. Q 16. Whether Works contracts and Catering services will be treated as supply of goods or supply of services? Why? Ans. Works contracts and catering services shall be treated as supply of services as both are specified under Sl. No. 6 (a) and (b) in Schedule-II of the GST law. Q 17. Whether supply of software would be treated as supply of goods or supply of services under GST law? Ans. Development, design, programming, customization, adaptation, upgradation, enhancement, implementation of information technology software shall be treated as supply of services as listed in Sl. No. 5 (2)(d) of Schedule -II of the GST law. Q 18. Whether goods supplied on hire purchase basis will be treated as supply of goods or suppl
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ies, Constitutional functionaries (iv) services of funeral, burial, crematorium or mortuary and (v) sale of land and (vi), actionable claims other than lottery, betting and gambling shall be treated neither a supply of goods or supply of services. Vide the CGST (Amendment), 2018, following transactions have also been inserted in the schedule-III: (vii) Merchant Trading or Out and Out transactions: Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India. (viii). (a) Supply of goods while the same are still in Customs Bonded warehouse: Supply of warehoused goods to any person before clearance for home consumption; (viii) (b) High Seas Sales: Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption. Q 20. What is meant by zero rated
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ly has been defined in Section 2(90) of the CGST Act as supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary. For example, where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is the principal supply. Q 23. How will tax liability on a composite supply be determined under GST? Ans. A composite supply comprising two or more taxable supplies, one of which is a principal supply, shall be treated as a supply of such principal supply. (Section 8(a) of CGST Act, 2017) Q 24. What is a mixed supply? Ans. Mixed Supply means two or more individual supplies of goods or services or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply. For example, a supply of package consi
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
iff) (CBIC Circular No. 34/8/2018-GST dated 1st March, 2018) Q 27. Whether activity of bus body building, is a supply of goods or services? Ans. The classification would depend on which supply is the principal supply. In case, a bus body building company builds on the chassis owned by it and sells the completely built buses, it would be supply of goods. On the other hand, if the company builds the body on the chassis belonging to some else, it would be supply of services. Q 28. Whether foods supplied to the patients as part of the healthcare services in hospitals taxable? Ans. Health care services provided by the clinical establishments will include food supplied to the patients. Therefore, food supplied to the in-patients as advised by the doctor/nutritionists is a part of composite supply of healthcare and not separately taxable. However, other supplies of food by a hospital to patients (not admitted) or their attendants or visitors are taxable. (CBIC Circular No. 32/06/2018-GST date
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
t in abeyance till 30.09.2019. Further as the recent CGST (Amendment) Act, 2018, sections 9 (4) shall only be applicable for specified class of registered persons which shall be notified by the government. However, the notification to bring the Act into effect is yet to be issued. Q 30. What are the supplies of goods under RCM? Ans. Supplies of goods under reverse charge mechanism: S/No. Description of supply of Goods Supplier of goods Recipient of Goods 1 Cashew nuts, not shelled or peeled Agriculturist Any registered person 2 Bidi wrapper leaves (tendu) Agriculturist Any registered person 3 Tobacco leaves Agriculturist Any registered person 4 Silk yarn Any person who manufactures silk yarn from raw silk or silk worm cocoons for supply of silk yarn Any registered person 4A Raw cotton Agriculturist Any registered person. 5 Supply of lottery State Government, Union Territory or any local authority Lottery distributor or selling agent 6 Used vehicles, seized and confiscated goods, old an
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =