TMI BlogThe Meaning and Scope of Supply - Section 7X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017 ] Explanation . For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another; Example A : There are 4 members in the JV including the operating member and each one contributes Rs 100 as part of their share. A total amount of Rs 400 is collected. The operating member purchases machinery for Rs 400 for the JV to be used in oil production. Example A will not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... important event determining the taxability of all transaction, whether commercial or otherwise. Thus, determining whether a transaction falls under scope of supply is most important to decide GST applicability of the transation. 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 six parameters, which can be adopted to characterize a transaction as supply: 1. Supply of goods or services. Supply of anything other than goods or services does not attract GST 2. Supply should be made for a consideration 3. Supply should be made in the course or furtherance of business 4. Supply should be made by a taxable person 5. Supply should be a taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred to in Schedule II . Following services are treated as deemed supply: Barter system. Permanent transfer or disposal of business assets. Supply of goods/services between related person or distinct person as defined in section 25. Principal supply of goods to his agents. Agents supplying goods to his principal. Import of services either from related person or any establishment outside India. Section 7(2) - No supply Activities or transactions specified in Schedule III shall be treated neither as a supply of goods nor a supply of services . [ section 7(2)(a) ] Government may by notification specify the activities or transactions undertaken by the Central Government, a State Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of activity Locker Rent in the bus-stand, the activity is not in relation to the functions entrusted under Article 243G and 243W of the Constitution and therefore is treated as Services and Locker Rent is liable to GST. Section 7(3) - Classification as Goods or services Subject to the provisions of sections 7 (1)/(1A) and (2), The Government may, on the recommendations of the Council, may 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 and not as a supply of goods Following are the essential ingredient for any transaction to be considered as Supply 1. Supply should be of good ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
