Direct & Indirect Taxes, Tax Ready Reckoner, Tax Management, Tax Act. & Rules, Tax Planning & Tax Savings.

Direct & Indirect Taxes, Tax Ready Reckoner, Tax Management, Tax Act. & Rules, Tax Planning & Tax Savings.

[Section 7(1)(a)]- All Forms of Supply of Goods or Services or both under GST

Indirect Taxes & GST India, Tax Management /

The term ‘supply’ is very wide and it includes all forms of supply of goods, or services or both. Illustrative  list specifies forms of supply such as Sale, Transfer, Barter, Exchange, Licence, Rental, Lease or Disposal made  or agreed to be made—

— for a consideration

— by a person

— in the course or furtherance of business.

Since none of the aforesaid eight terms namely Sale, Transfer etc. have been defined in the Central Goods and  Services Tax Act, 2017 or Integrated Goods and Services Tax Act, 2017; reliance has been placed on leading  online dictionaries for the purpose of ascertaining the meanings of the said terms in the following table:

[Section 7(1)(a)]- All Forms of Supply of Goods or Services or both under GST
[Section 7(1)(a)]- All Forms of Supply of Goods or Services or both under GST
Sale The act of selling; specifically : the transfer of ownership of and title to property from one person  to another for a price
The exchange of a commodity for money; the action of selling something
The exchange of goods or services for an amount of money or its equivalent; the act of selling
Transfer To move someone or something from one place, vehicle, person, or group to another
To make something the legal property of another person
Barter To exchange goods for other things rather than for money
To trade by exchanging one commodity for another: to trade goods or services in exchange for  other goods or services
Exchange (goods or services) for other goods or services without using money
Exchange The act of giving something to someone and them giving you something else
To give up, part with, or transfer (one thing) for an equivalent
License To give someone official permission to do or have something
A permit from an authority to own or use something, do a particular thing, or carry on a trade
A contract allowing someone to use a proprietary product or service
Rental An arrangement to rent something, or the amount of money that you pay to rent something
A sum paid to someone for the use of (something, typically property, land, or a car)
Lease A contract by which one conveys real estate, equipment, or facilities for a specified term and for a  specified rent
A contract granting use or occupation of property during a specified period in exchange for a  specified rent or other form of payment.
Disposal The act of getting rid of something, especially by throwing it away
Final placement or riddance of wastes, excess, scrap, etc., under proper process and authority with  (unlike in storage) no intention to retrieve. Disposal may be accomplished by abandonment,  destruction, internment, incineration, donation, sale, etc.
See also  Pre-GST Regime and GST Regime in respect of Indirect Taxes

However, it is worth emphasizing here that besides the above illustrative forms of supply, there can be other  forms of supply of goods or services or both.

(A) Future Supply shall also be covered

All forms of supply of goods or services or both made or agreed to be made shall be covered. The use of the  expression “agreed to be made” points out that supply of goods or services or both in future shall also be subject  to tax. It has been done intentionally to tax the advance received prior to the supply of goods or services or both  except in the case of registered person whose aggregate turnover does not exceed Rs. 1.5 crore.

1. Since supply is an inclusive definition, anything that is falling under the meaning of the term “supply” will  get covered under the taxable event.

2. The terms “goods”, “services”, “consideration” and “in the course or furtherance of business” have been  discussed later in this Chapter.

(B) [Section 7(1)(b)]- Import of Service for a consideration whether or not in course or furtherance of business

It may be noted that in the above case, only those import of services shall be treated as supply which are for a  consideration even though such import of services may be in the course or furtherance of business or not.

Example 1 

X is a supplier of goods located in New Delhi. In July 2018, he has imported ‘Business Consultancy Services’  from China for a stipulated consideration of $50,000. The importation of service in the given case shall fall  within the ambit of term ‘supply’ as it is for a consideration and in the course or furtherance of business and shall  be liable to IGST.

Example 2 

X is a supplier of goods located in New Delhi. In July 2018, he has imported ‘Architecture Services’ from a  relative consultant located in China, without any consideration (monetary or non-monetary) for construction  of his personal house. Since there is no consideration and it is for personal use, importation of service in the given  case shall not fall within the ambit of term ‘supply’ and not liable to IGST.

However, in the above example if the import of Architecture Service is for a consideration, it shall fall within  the scope of term ‘supply’ although services have been imported for personal purposes.

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