meaning & scope of supply under gst

Meaning & Scope of Supply under GST

CA Shankara Narayanan VB.Com, F.C.A, A.C.M.A

1

Why Supply ?

Everything in the India

Definition of Goods & Services

Only when SUPPLY

Only when covered by Charging Section

9th Aug 2021 CA Shankara Narayanan V, Chennai 2

Goods

“Goods” means

• every kind of movable property

• other than money and securities

• but includes actionable claim,

growing crops, grass and things

attached to or forming part of the

land which are agreed to be severed

before supply or under a contract 9th Aug 2021 CA Shankara Narayanan V, Chennai 3

Service

“Services” means

• anything other than goods, money and

securities

• but includes activities relating to the use of

money or its conversion by cash or by any

other mode, from one form, currency or

denomination, to another form, currency or

denomination

• for which a separate consideration is charged;


Section 7 – Scope of Supply

Supply

Supply in General

Import of Service

Activities done even

without Consideration

(Schedule I)

Activities not to be treated as

Supply (Schedule III)

Certain Activities or transactions shall be treated either as Supply of Goods or Supply of Service as referred to in Schedule II.


For a Consideration –Sec 2(31) of CGST

In the course or furtherance of Business

Sec 2(17) of CGST

Sale/ Transfer/ Barter/ Exchange/License/

Rental/ Leases/ Disposal

Made or agreed to be made

All Forms of Supply

of G or S

Sec 7(1)(a) – Supply in General

By a Person - Sec 2(84) of CGST


For a Consideration

In the course or furtherance of

Business or Non Business

Import of

Service

Sec 7(1)(b) – Import of Service

By a Person

Sec 2 (11) of IGST Act, 2017 - Import of services means the supply of any service, where (i) the supplier of service is located outside India; (ii) the recipient of service is located in India; and (iii) the place of supply of service is in India;



Supply

Supply in General

Import of Service



(Schedule I)





1. Permanent transfer or disposal of business

assets where input tax credit has been availed

on such assets

Schedule – 1 - Deemed Supply

Case Study

◼ On the day of retirement of Mr. Paranjyothi from

NVP Ltd., as CEO, the company decides to gift

him the Car and Laptop used by him while

performing official duties.

– Discuss Taxability of the above

2. Supply of goods or services or both between

related persons or between distinct persons as

specified in section 25, when made in the course

or furtherance of business:


Related Person

Section 15 - Explanation.—For the purposes of this Act,–

(a) persons shall be deemed to be “related persons” if––

(i) such persons are officers or directors of one another’s

businesses;

(ii) such persons are legally recognised partners in

business;

(iii) such persons are employer and employee;

Related Person

Section 15 - Explanation.—For the purposes of this Act,–

(a) persons shall be deemed to be “related persons” if––

(iv) any person directly or indirectly owns, controls or

holds twenty-five per cent. or more of the outstanding

voting stock or shares of both of them;

(v) one of them directly or indirectly controls the other;

Related Person

Section 15 - Explanation.—For the purposes of this Act,–– (a)

persons shall be deemed to be “related persons” if––

(vi) both of them are directly or indirectly controlled by a

third person;

(vii) together they directly or indirectly control a third

person; or

(viii) they are members of the same family;

Related Person

Section 15 - Explanation.—For the purposes of this Act,–– (a)

persons shall be deemed to be “related persons” if––

(b) the term “person” also includes legal persons;

(c) persons who are associated in the business of one

another in that one is the sole agent or sole distributor or

sole concessionaire, howsoever described, of the other, shall

be deemed to be related.

◼ Sec 25 (4)- person who has obtained or is required

◼ to obtain more than one registration

◼ Whether in one State or more than one State

◼ shall in respect of each such registration

◼ be treated as distinct persons


2. Supply of goods or services or both between

related persons or between distinct persons as

specified in section 25, when made in the course

or furtherance of business:


Provided that gifts not exceeding fifty

thousand rupees in value in a financial year by

an employer to an employee shall not be treated

as supply of goods or services or both.


Case Study

◼ AK Ltd. is a manufacturing organisation in the outskirts

of Chennai. It provides Food & Transportation Free of

Cost to its employees

– Is this Food & Transportation Taxable under GST

– Will it warrant taxability if AK Ltd. is recovering a portion of

the cost incurred from employees

3. Supply of goods—

(a) by a principal to his agent where the agent

undertakes to supply such goods on behalf of

the principal; or


3. Supply of goods—

(b) by an agent to his principal where the agent

undertakes to receive such goods on behalf of

the principal.


4. Import of services by a taxable person from a

related person or from any of his other

establishments outside India, in the course or

furtherance of business



Supply

Supply in General

Import of Service



(Schedule I)





Schedule – 2 – Supply of Goods or Services

Transfer

Goods

Title Transfer

Title Transfer at future date

Service

Right / Undivided

Share but not Title


Land & Building

Goods NIL

Service

Lease, Tenancy, Easement,

Licence to occupy land

Lease, Letting out of Building (Commercial / Residential) – Wholly

/ Partly


Treatment / Process

To other Persons Goods Service


Transfer of Business Assets

Goods

Business Assets – No Longer forming part

of Business

Ceases to be Taxable Person

ServiceUse of business

assets for Personal / Non Business


Transfer of Business Assets

Goods

Ceases to be Taxable

Person

Goods forming part shall be DEEMED to be Supplied ICOFB

Exception

Business is TRANSFERRED

as GOING CONCERN


Supply of Services

Renting of Immoveable

Property

Construction of Complex, Building, Civil Structure –

Intended for Sale to a Buyer – EXCEPT Entire

Consideration received after Completion / First

Occupation


Composite Supply of Services

Works Contract

Sec 2 (119)

Supply by way of or part of – Food or Drink

(other than liquor)


“works contract” means a contract for building,

construction, fabrication, completion, erection,

installation, fitting out, improvement, modification,

repair, maintenance, renovation, alteration or

commissioning of any immovable property wherein

transfer of property in goods (whether as goods or in

some other form) is involved in the execution of such

contract;


Supply

Supply in General

Import of Service



(Schedule I)





Schedule – 3 – Neither Supply of Goods / Services

Employee Services

TO

Employer

Under Contract of Employment


Services

BY

Court Tribunal


Member of Parliament

Member of Legislative Assembly

Constitutional Capacity

Member of Panchayat /

LA

Services

BY


•Funeral, Burial, Crematorium, Mortuary

•Transportation of Deceased

Services of

•Actionable Claims other than

•Lottery

•Gambling

•Betting

Goods nature of


Sale of Land & Sale of Building

Subject to Schedule II

Para 5

Case Study – 1

◼ R Ltd. Chennai, is importing Oil from Thailand

◼ These goods are warehoused under Customs

◼ Subsequently, R Ltd. finds a buyer in Kolkata and sells

these Goods

◼ Taxability ?

Ex-Bond Sale


8. (a) Supply of warehoused goods to

any person before clearance for home

consumption;

Case Study – 2

◼ V Ltd. Bengaluru, has placed an order with their

Supplier in Indonesia to supply Steel

◼ Before the goods reached the Indian Customs, it was

sold to K Ltd., Kanpur by way of Transfer of document

of title to goods

◼ Taxability ?

High Seas Sale


8. (b) Supply of goods by the consignee to

any other person, by endorsement of

documents of title to the goods, after the

goods have been dispatched from the port of

origin located outside India but before

clearance for home consumption.

Case Study – 3

◼ A Ltd. in Hyderabad has got its customer in Dubai

SAA Ltd and supplier in Malaysia P Ltd

◼ A Ltd., places an order on P Ltd. to directly supply the

Goods to SAA Ltd

◼ Taxability ?

Merchant Trade Transaction


7. 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.


Alcoholic Liquor License from

government

Composite Supply

“composite supply” means a supply made by a taxable

person to a recipient consisting of two or more taxable

supplies of goods or services or both, or any

combination 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

Mixed Supply

“mixed supply” means two or more individual

supplies of goods or services, or any combination

thereof, made in conjunction with each other by a

taxable person for a single price where such supply

does not constitute a composite supply

Supply – Case Study

Hotel Happy Ltd., a 5 Star Hotel in Coimbatore, has come up

with an offer of Rs. 1500/- for buffet dinner with unlimited

liquor

Is Rs. 1,500/- taxable under GST?

Supply – Case Study

Mr. X has involved in trading of gutkha pan masala etc.,

which is banned in Tamilnadu. The CTO finds his entire

billing during an investigation.

Section 8 – Taxability of Composite & Mixed Supply

a composite supply comprising two

or more supplies, one of which is a

principal supply, shall be treated as a

supply of such principal supply;

and

Section 8 – Taxability of Composite & Mixed Supply

a mixed supply comprising two or

more supplies shall be treated as a

supply of that particular supply

which attracts the highest rate of

tax.

Exemptions

Exemptions

Section 11 of CGST Act

Section 6 of IGST Act

Goods Services

Nature of Exemptions

Exemptions

Whole

Partial Conditional

Unconditional

Types of Supply

◼Taxable Supply

◼Zero Rated Supply

◼Exempted Supply

◼Not Taxable Supply

◼Nil Rated Supply

◼Non GST Supply

CA Shankara Narayanan V

Partner, GPVS & AssociatesChennai & Bengaluru

Mobile: +91 96000 89209

E- Mail : [email protected]

Disclaimer: The author of this presentation makes no warrant, and expressly disclaim any obligation, that; (a) the informationcontained therein will be complete, accurate, or up to date; (b) the results obtained from the use of such information will beaccurate or reliable; (c) the quality of such information will meet the users expectation’s. The author is not responsible or liablefor any loss, claim, delay or damages of any kind that may arise out of or in connected with use of such information. The authorexpressly disclaims for any act or omission, or any consequences of any act or omission by any user relaying on information

provided in this document or interpretation thereof. © 2021 CA Shankara Narayanan V

meaning & scope of supply under gst

Documents