Goods and Services Tax – GST – By: – Bimal jain – Dated:- 5-9-2016 Last Replied Date:- 30-12-1899 – Dear Professional Colleague, Goods Vs. Services in GST: Concept and Open Issues As Goods and Services Tax ( GST ) is going to be levied on supply of goods and/or services, meaning of goods and services would also play vital role in levy and chargeability of GST after the key term supply . It has to be clearly identified as to whether the supply constitutes supply of goods or services for leviability of GST. Importance of the terms goods and services would become all the more important if rates of GST on goods and services are going to be different. This article attempts to decipher the main terms namely goods and services in the light of provisions contained in Model GST Law, to provide conceptual clarity as regards the meaning of goods and services in GST along with highlighting the key issues therein. Meaning of goods in GST: The term goods has been defined under Section 2(48) of the
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does not include money. Apparently, the term service has been defined in the widest sense possible as any transaction which is not goods, shall be services except money. Whether Immovable property is service: As the definition of the term service is wide enough to cover anything other than goods, this would mean that even any rights or usage of immovable property would also constitute services under GST. Actionable claim is a service: It may be noted here that unlike the definition of service as given under Section 65B(44) of the Finance Act, 1994 ( the Finance Act ), which excludes transaction in money and actionable claim from the taxable net of Service tax, the proposed definition of service under GST only states exclusion of money and specifically includes actionable claim. Thus, actionable claims would be service and exigible to GST unlike the Finance Act, where the same has been specifically excluded from the taxable net of Service tax. Basically, actionable claim means the clai
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on of service only states that money is excluded from its ambit, the same needs to be revisited to avoid any confusion as exclusion of money alone does not convey real nature of exclusion. Examples of transaction in money: The principal amount of deposits in or withdrawals from a bank account. Advancing or repayment of principal sum on loan to someone, etc. Whether intangibles are goods or services? It may be noted here that the definition of goods given under Article 366(12) of the Constitution of India is defined in inclusive manner to provide that goods includes all materials, commodities, and articles . Further, as per proposed Article 366(26A) services means anything other than goods . Thus, the definition of goods and services in Model GST Law are different from the definitions given in the Constitution. Further, from the settings of Article 366(12) of the Constitution, it is apparent that inclusive definition of goods incorporates both tangible as well as intangible goods, which
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inalising the Model GST Law, this could prove to be an additional burden, which in turn would blemish the domestic investments in India, as sale of securities outside India would qualify as export and can take over as preferred choice for attracting investments. At the same time, one may also infer that securities are one of the forms of transaction in money, which are neither goods nor services as per the definitions provided under Model GST Law. With the definition of goods and services provided under the Model GST Law, placed on public domain on June 14, 2016, it would be important for the Industry to appropriately understand and categorise the different types of the supplies made by them to assess the impact on taxability. However, considering the fact that both these crucial terms have been defined in extensive manner, the corresponding list of exemptions made available on goods and services would also be important. While, the act of putting Model GST law on public domain for seek
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