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SCOPE AND MEANING OF SUPPLY IN GST

Goods and Services Tax - GST - By: - Dr. Sanjiv Agarwal - Dated:- 15-7-2017 Last Replied Date:- 15-7-2017 - Statutory Provisions Section 7 of CGST Act 2017 provides for scope of supply as under: (1) For the purposes of this Act, the expression supply includes- (a) all forms of supply of goods or services or both 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; (b) impor .....

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vernment 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. (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; or (b) a supply of services .....

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m Supply has been defined in an inclusive manner. The word includes in definition is used to enlarge the meaning of the words or phrases occurring in the body. Thus the specific transactions listed in Section 7 are only illustrative and the definition would be widened to include other similar kind of transactions. It may be noted that the term transfer used in the definition of supply has not been used in rest of GST law. Whereas the term removal has been defined in the Act but the same has not .....

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ord than barter. In commercial world, the words barter and exchange are used interchangeably. The GST has to be calculated on a numerical value. Valuation will become important in the transactions of exchange or barter. The valuation in such transactions will be arrived at on the basis of Valuation Rules, which have been be notified under GST separately. Licence is a permission by one person to another to do some act which would be unlawful without such permission. In the commercial world, licen .....

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party agrees to convey an estate in property to another person for a consideration. The lease could be of immovable property or movable property. In the contract of lease, the ownership is not transferred and is retained by the lessor but the possession and right to use is transferred to the other party called lessee. Though the terms rental and leasing are used inter-changeably, there is a slight difference in the two. Lease is a contract to rent an asset for a set period of time and for set te .....

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upply to tax the advance receipt of payment against a contract for the supply of goods and/or services. Even non-monetary consideration has been included in the definition of Consideration. In the case of contracts of exchange or barter the total consideration will be treated non monetary and would require to be valued on the basis of valuation principles to be laid in rules of GST law. It is important to note that in a transaction of supply, the payment of consideration could be made by a perso .....

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ion for the purpose of GST. Any subsidy received from Central or State Government would not be includable in taxable value but subsidy received from any other source which is linked to the product will be part of taxable consideration. The taxability of deposits will depend on the treatment given to such deposits. In case these deposits are not adjustable, then these will not become part of consideration but in case some kind of adjustments are made in the deposit amount, then such deposit will .....

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vices whether in the course of business or whether for personal use will be considered supply and would be taxable. Thus, import of services even by a non-taxable person would also be taxable in GST. The import of goods will continue to be subject of Customs law. Supplies under Schedule-I Besides the transactions of supply with consideration, certain forms of transactions as mentioned in Schedule I of the Act have also been considered as taxable supply in GST. Such transactions are as follows:- .....

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es to supply goods on behalf of principal. by an agent to his principal, where the agent undertakes to buy such goods on behalf of his principal. Importation of services by a taxable person from a related person or any of his establishment outside India, in the course or furtherance of business. The transactions of supply between a principal and agent and also between two branches of the same person would be considered as a taxable supply. The transactions of stock transfers would become taxable .....

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ne of the areas of dispute is the classification of goods and service correctly as these definitions have widened to a very large extent. GST law attempts to resolve this dispute by providing Schedule II in the Act, which prescribes which item will be considered goods and which item will be considered service. In this regard, the Central or State Governments have the power to declare any item as goods or service or nothing of the two. But this power by the Government can be used only with the ap .....

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