Definition Of Goods-Issues and comparision
By: – parth sharma
Goods and Services Tax – GST
Dated:- 13-9-2016
Definition of Goods in Model GST law is seeing various complications which needs clarification. Comparison of definition of goods with previous laws is as under:-
Model GST Law
(48) “goods'' means every kind of movable property other than actionable claim and money but includes securities, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under the contract of supply;
Explanation- For the purpose of this clause, the term 'moveable property' shall not include any intangible property.
Section 2(48) Finance Act 1994. “goods” means every kind of mov
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tion of works contract, livestock and all other things attached to or forming part of the land which is agreed to be severed before sale or under the contract of sale;
Discussion 1.-Scrap
The definition was originally borrowed from Sales of Goods Act,1932.
Though the definition speaks that all movable property is goods but it has been held by judiciary that “Goods should have a commercial aspect of capable of being purchased and sold and served as a result of such sale. Goods in order to be called as goods should satisfy the test of marketability i.e. they should be something which can be ordinarily come to the market to be bought and sold. It must be something which is known to the customers and the commercial community.”
In CEA, there
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viable to Vat as per Case of TCS. Moreover, SC was silent on chargeability of uncanned software and said that it may be goods. However, even uncanned software is intangible property (goods) and transfer of right to use will be chargeable to VAT.
In service tax law, temporary transfer of IPR will be liable to service tax. Non exclusive licensing will be liable to service tax. Development of software (uncanned software) will be chargeable to service tax vide sec 66E(d).
Conclusion is that in case of software which are developed and put on a media disk, both Vat and service tax is being charged which led to double taxation.
To end this double taxation, a explanation is added to make intangibles as service and would be taxed as service.
Dis
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