by The taxable event in GST is supply of goods or services or both. Various taxable events like manufacture, sale, rendering of service, purchase, entry into a territory of State etc. have been done away with in favour of just one taxable event i.e. supply. The constitution defines “Goods and Services tax” as any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption.
The term, “Supply” has been inclusively defined in the Act. The meaning and scope of supply under GST can be understood in terms of following parameters, which can be adopted to characterize a transaction as supply:
- Supply of goods or services or both (Supply of anything other than goods or services does not attract GST).
- Supply should be made for a consideration.
- Supply should be made in the course or furtherance of business.
- Supply should be a taxable supply.
[Sec. 7(1)(a)]
All forms of supply of goods and/or services such as:
- Sale: Transferring the property in goods from one to another, upon valuable consideration
- Transfer: Any transfer of goods or right in goods or of undivided share in goods without transfer of title thereof.
- Barter: To exchange one commodity for another without use of money.
- Exchange: To swap, to part with, give or transfer for an equivalent with the use of money.
- License: Permission granted by competent authority to exercise certain privileges without such authorization the activity would have constituted as an illegal act.
- Rental: Periodical payment for the use of another property.
- Lease: Contractual agreement by which one party conveys an estate in property to another party, for a limited period, subject to various conditions, in exchange for something of value, but still remain ownership.
- Disposal: To pass or into the control of someone else; to alienate, bestow, or part with.
Import of services [Sec. 7(1)(b)]
Import of services for a consideration whether or not in the course or furtherance of business:
Analysis:
- Import of goods is dealt separately under the Customs Act, 1962, wherein IGST shall be levied as additional duty of customs in addition to basic customs duty under the Customs Tariff Act, 1975.
- Persons importing services for personal purposes shall also be liable to GST on reverse charge basis.
- It should be noted that there is no threshold limit in reverse charge.
- This is an exception of supply in the course or furtherance of business.
Supply without consideration [Sec. 7(1)(c)]
The activities specified in Schedule I, made or agreed to be made without a consideration.
Whether activity to be treated as Supply of goods or supply of services [Sec. 7(1)(d)]
The activities to be treated as supply of goods or supply of services as referred to in Schedule II.
Nor supply of goods or services [Sec. 7(2)]
Notwithstanding anything contained in sub-section (1)
(a) Activities or transactions specified in Schedule III.
(b) Such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council, shall be treated neither as a supply of goods nor a supply of services.
Issue of Notification by Government [Sec. 7(3)]
Subject to the provisions of sub-sections (1) and (2), the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as:
(a) A supply of goods and not as a supply of services.
(b) A supply of services and not as a supply of goods.
