Meaning and Scope of Supply
GST FAQ 3rd Edition – December, 2018 – GST Frequently Asked Questions (FAQs)
GST
4. Meaning and Scope of Supply
\nQ 1. What is the taxable event under GST?
\nAns. 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'.
\nQ 2. What is the scope of 'supply' under the GST law?
\nAns. 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 s<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n nder Schedule-I of CGST \/SGST Act, where one or more ingredients specified in answer to question no.4 are not satisfied, it shall still be treated as supply for levy of GST. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n lary to the aforementioned listed activities. In addition, any activity undertaken by the Central Govt. or a State 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. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n state and where it is in different states it will be inter-state supplies. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ny Court or Tribunal established under any law, = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n \nOn the other hand, supply of retreaded tyres, where the old tyres belong to the supplier of retreaded tyres, is a supply of goods (retreaded tyres under heading 4012 of the Customs Tariff) = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n provision of reverse charge liability on supplies received from unregistered persons, as provided in sections 9 (4) and 5 (4) of the CGST Act and the IGST Act respectively, have been kept 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. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" Meaning and Scope of SupplyGST FAQ 3rd Edition – December, 2018 – GST Frequently Asked Questions (FAQs)GST4. 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 … Continue reading “Meaning and Scope of Supply”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-15999","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/15999","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15999"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/15999\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15999"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15999"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15999"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nQ 6. Import of Goods is conspicuous by its absence in Section 7. Why?
\nAns. 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.
\nQ 7. Are self-supplies taxable under GST?
\nAns. 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<\/p>\n
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\nQ 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.
\nAns. 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.
\nQ 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?
\nAns. Yes. As per Sl. No.1 of Schedule-I, permanent transfer or disposal of business assets<\/p>\n
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\nQ 15. Whether transfer of right to use goods will be treated as supply of goods or supply of service? Why?
\nAns. 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.
\nQ 16. Whether Works contracts and Catering services will be treated as supply of goods or supply of services? Why?
\nAns. 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.
\nQ 17. Whether supply of software would be treated as supply of goods or supply of services under GST law?
\nAns. Development, design, programming, customization, adaptation, upgradation, enhancement, implementation of information technology software shall be treated as supply of services as listed in Sl. No.<\/p>\n
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\n(iii) functions performed by members of Parliament, State Legislatures, members of the local authorities, Constitutional functionaries
\n(iv) services of funeral, burial, crematorium or mortuary and
\n(v) sale of land and
\n(vi), actionable claims other than lottery, betting and gambling shall be treated neither a supply of goods or supply of services.
\nVide the CGST (Amendment), 2018, following transactions have also been inserted in the schedule-III:
\n(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.
\n(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;
\n(viii) (b) High Seas Sales: Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods,<\/p>\n
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\nPrincipal supply 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.
\nFor 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.
\nQ 23. How will tax liability on a composite supply be determined under GST?
\nAns. 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)
\nQ 24. What is a mixed supply?
\nAns. Mixed Supply means two or more individual supplies of goods or services or any combination <\/p>\n
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\n(CBIC Circular No. 34\/8\/2018-GST dated 1st March, 2018)
\nQ 27. Whether activity of bus body building, is a supply of goods or services?
\nAns. 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.
\nQ 28. Whether foods supplied to the patients as part of the healthcare services in hospitals taxable?
\nAns. 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 healt<\/p>\n
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\nQ 30. What are the supplies of goods under RCM?
\nAns. Supplies of goods under reverse charge mechanism:
\nS\/No.
\nDescription of supply of Goods
\nSupplier of goods
\nRecipient of Goods
\n1
\nCashew nuts, not shelled or peeled
\nAgriculturist
\nAny registered person
\n2
\nBidi wrapper leaves (tendu)
\nAgriculturist
\nAny registered person
\n3
\nTobacco leaves
\nAgriculturist
\nAny registered person
\n4
\nSilk yarn
\nAny person who manufactures silk yarn from raw silk or silk worm cocoons for supply of silk yarn
\nAny registered person
\n4A<\/p>\n
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