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1. Statutory definition
Supply is pivotal concept under entire GST framework, all laws, rules,
regulations and administration of the GST Laws revolve around this concept.
Worldwide the taxation event under GST or VAT is Supply. It has been defined
under Section 3 of Model GST Act, Schedule specify the transactions which
are considered as Supply even if there is no consideration involve in such
transactions.
(a) all forms of supply of goods and/or services such as sale, transfer, barter,
exchange, license, rental, lease or disposal made or agreed to be made for a
consideration by a person in the course or furtherance of business,
consideration.
(2) Schedule II, in respect of matters mentioned therein, shall apply for
determining
(4) Subject to sub-section (2) and sub-section (3), the Central or a State
Government may, upon recommendation of the Council, specify, by
notification, the transactions that are to be treated as
(b) a mixed supply comprising two or more supplies shall be treated as supply
of that particular supply which attracts the highest rate of tax.
The term Supply has given very wide meaning under the GST Laws, in
general, the definition of supply for GST purposes covers all forms of supply
where goods and services are supplied in return for a consideration. Any
supply of goods and services without consideration is not a supply unless it is
deemed to be a supply under Schedule - II. Schedule also listed
circumstances when a transaction shall deemed to be a Supply.
1.3 Activities which are neither supply of goods nor supply of Services
Section 3(3) of Model GST Act provides that the activities or transactions
specified in Schedule-III and Schedule IV will not be considered as Supply of
goods or services. The activities or transactions undertaken by the Central
Government or a State Government or any local authorities engaged as public
authorities are specified in Schedule- IV, these transaction or activities will not
be considered as supply of goods.
1.5 Consideration
As per Section 3(5) of Model GST Act, the tax liability on a composite or a
mixed supply shall be determined in the following manner:
This provision is important for the purpose of classification for charging of GST
on a Composite Supply or a Mixed Supply.
2. Scope of Supply
2.1 Inclusive definition:
The definition of Supply is inclusive definition, the inclusive definition enlarge
the scope of definition of supply. The inclusiveness of the definition of supply
virtually increases the ambit of entire GST. The inclusive definition of
manufacture provided under Section 2(f) of Central Excise Act, 1944 has been
source of numbers of litigation between regulators and assessee and from
time to time settled by Supreme Court, still these litigations has not been
stopping and ground-breaking ideas of regulators keep working to grill
assessee under this inclusiveness. Therefore it was expected from the law
makers that the definition of Supply to be coined as definitive.
The definition of Supply swipes almost all possible expressions which can be
referred as supply. The following forms of supply of goods and/or services
which are made or agreed to be made for a consideration by a person in the
course or furtherance of business,
Sale;
Transfer;
Barter;
Exchange;
License;
Rental;
Lease or
Disposal
furtherance of business.
Question No. 9:
Section 3(1) provides that importation of service for consideration whether for
business or not, will also be considered as supply.
ii. All the condition listed 2(11) of IGST Act relating to import of service
shall be complied with;
Any business asset and which have been used for business purpose, its
transfer will be treated as supply, even if there was no consideration
have been receipt during its transfer.
The term business assets not defined under the model law, it is
not clear whether it is capital assets or any other assets.
Input tax credit must have been availed on such capital assets on its
acquisition under GST regime, where such assets was acquired prior to
the appointed date and input tax paid under such assets were duly
migrated to GST regime.
a. Intra state stock transfer, when an entity has more than one registration in
one State and;
The effect of the above new insertion makes two key changes, i.e.,