SUPPLY in GST

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NECESSARY ELEMENTS OF ‘SUPPLY’

 Section 2(101) “taxable territory’’ means the territory to which the provisions of CGST Act 2017 apply.

It is important to note that unlike Service Tax legislation (which does not apply to Jammu & Kashmir), GST will apply throughout India.

Taxable person

(1) Taxable Person means a person who is registered or liable to be registered under Schedule V of CGST Act 2017.

(2) A 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 for the purposes of this Act.

(3) An establishment of a person who has obtained or is required to obtain registration in a State, and any of his other establishments in another State shall be treated as establishments of distinct persons for the purposes of this Act.

Who is a Taxable Person?

As per Section 2 (98) of GST Act “taxable person’ shall have the meaning as assigned to it in section 10’’.

Section 10 of GST Act states that a  ‘Taxable Person’  means a person who is registered or liable to be registered under Schedule V of this Act.

As per aforesaid section GST is applicable when aggregate turnover in the financial year exceeds Rs 20 lakhs, however, if a person conducts his business in any Special States then threshold will be Rs 10 lakhs.

Section 2(73) of CGST Act 2017

 “Person” includes –

  • An individual;
  • A Hindu undivided family;
  • A company;
  • A firm;
  • A Limited Liability Partnership;
  • An association of persons or a body of individuals, whether incorporated or not, in India or outside India;
  • Any corporation established by or under any Central, State or Provincial Act or a Government company as defined in Section 2(45) of the Companies Act, 2013;
  • Anybody corporate incorporated by or under the laws of a country outside India;
  • A co-operative society registered under any law relating to cooperative societies;
  • A local authority;
  • Government;
  • Society as defined under the Societies Registration Act, 1860;
  • Trust; and
  • Every artificial juridical person, not falling within any of the preceding sub-clauses;

TAXABLE SUPPLY

Sec 2(99) “taxable supply’’ means a supply of goods and/or services which is chargeable to tax under this Act;

Section 2(95) “Supply” shall have the meaning as assigned to it in section 3; Sec (3) (1) Supply includes—

  • 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,
  • Importation of services, for a consideration whether or not in the course or furtherance of business, and
  • A supply specified in Schedule I, made or agreed to be made without a consideration.

(1)  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—

  • A supply of goods and not as a supply of services; or
  • A supply of services and not as a supply of goods; or
  • Neither a supply of goods nor a supply of services

(2)  The tax liability on a composite or a mixed supply shall be determined in the following manner —

  • 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;
  • A mixed supply comprising two or more supplies shall be treated as supply of that particular supply which attracts the highest rate of tax.

 COMPOSITE SUPPLY

“Composite supply” means a supply made by a taxable person to a recipient comprising two or more supplies of goods or services,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;

PRINCIPAL SUPPLY Section 2(78)

“Principal supply” means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary and does not constitute, for the recipient an aim in itself, but a means for better enjoyment of the principal supply;

MIXED SUPPLY Section 2(66)

“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

 GOODS Section 2(49)

“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 of supply; 

SERVICES Section 2(92)

“Services’’ means anything other than goods.

Explanation:

Excludes money and securities Includes transactions in money relating to use of money/ conversion by cash/ any other mode from one form to another for which a separate consideration is charged.

BUSINESS

“Business” includes –

  • Any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a
  • Pecuniary benefit;
  • Any activity or transaction in connection with or incidental or ancillary to (a) above;
  • Any activity or transaction in the nature of (a) above, whether or not there is volume, frequency, continuity or regularity of such
  • transaction;
  • Supply or acquisition of goods including capital assets and services in connection with commencement or closure of business;
  • Provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits
  • to its members, as the case may be;
  • Admission, for a consideration, of persons to any premises; and
  • services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade,
  • profession or vocation; i.e. service by director
  • services provided by a race club by way of totalisator or a license to book maker in such club;
  • – Any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities shall be deemed to be business.

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