READING DOWN MODEL IGST ACT (PART-4)
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 19-7-2016
'Supply' is going to be altogether a new concept in the indirect taxation, far away from manufacture (central excise), provision of service (service tax) or sale (value added tax). This concept will change the citus of taxation from 'origin' to 'destination' and is thus a total 'U-turn' from the present day taxation regime.
Meaning of Supply [Section 2(f)]
The term 'supply' has been defined to mean the same as defined in section 3 of the CGST Act, 2016 which provides for meaning and scope of 'supply'.
This section provides for the meaning and scope of supply of goods and services. There is no concept of supply of goods and services in the present law either in Service Tax or Central Excise. In the proposed law, supply of goods or services shall include the following:
* lease or disposal, and
* Importation of
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rivate or non-business use.
* Self supply of goods and/or services.
* Assets retained after deregistration.
* Supply of goods / services by a taxable person to another taxable or non-taxable person in the course or furtherance of business.
As Schedule-I includes matters to be treated as supply without consideration, the scope of 'supply' becomes much wider or unlimited. It shall cover services put to any private or non-business use and supply of goods or services by a taxable person to another taxable or non-taxable person in the course of or furtherance of business. (e.g., free gifts or samples, free services to friends etc).
It may however, be noted that supply of goods by a registered person to a job worker as per section 43A dealing with special procedure for removal of goods will not be treated as supply of goods.
Schedule II to Model GST law shall govern supply of goods or services in relation to transfer, land and building treatment or process, transfer of busi
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and collected in such manner as may be prescribed.
The Integrated Goods and Service Tax shall be paid by every taxable person in accordance with the provisions of this Act.
Supply of goods / services in inter-state trade or commerce
section 3 of the IGST Act provides for principles for determining supply of goods and /or services in the course of inter-state trade or commerce. Accordingly,
Subject to the provisions of section 5, a supply of goods shall be deemed to take place in the course of inter-State trade or commerce if the location of the supplier and the place of such supply are in different States.
Subject to the provisions of section 6, a supply of services shall be deemed to take place in the course of inter-State trade or commerce if the location of the service provider and the place of supply of service are in different States.
This section corresponds to sections 3 to 5 of CST Act, 1956. The provisions of section 3 shall determine as to when supply of goods or s
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services in the course of intra-state trade or commerce
Services 3A of the IGST Act provides for the supply of goods and / or services in the course of intra-state trade or commerce as follows –
Subject to the provisions of section 5, intra-state supply of goods means any supply where the location of the supplier and the place of supply are in the same State.
Subject to the provisions of section 6, intra-state supply of services means any supply where the location of the supplier and the place of supply are in the same State.
Accordingly, whereas place of supply of goods or services shall be determined in terms of section 5 and 6 respectively, intra-state supply shall mean-
* in case of goods – any supply of goods where location of the supplier and place of supply are located in the same state.
* in case of services – any supply of services where the location of supplier and place of supply are in the same state.
These principles can be better understood by the following m
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