Meaning & Scope of Supply under GST
Transcript of Meaning & Scope of Supply under GST
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Meaning & Scope of Supply under GST
CA Shankara Narayanan VB.Com, F.C.A, A.C.M.A
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Why Supply ?
Everything in the India
Definition of Goods & Services
Only when SUPPLY
Only when covered by Charging Section
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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
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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;
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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.
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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
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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;
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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.
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1. Permanent transfer or disposal of business
assets where input tax credit has been availed
on such assets
Schedule – 1 - Deemed Supply
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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
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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:
Schedule – 1 - Deemed Supply
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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;
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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;
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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;
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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.
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◼ 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
Schedule – 1 - Deemed Supply
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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:
Schedule – 1 - Deemed Supply
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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.
Schedule – 1 - Deemed Supply
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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
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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
Schedule – 1 - Deemed Supply
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3. Supply of goods—
(b) by an agent to his principal where the agent
undertakes to receive such goods on behalf of
the principal.
Schedule – 1 - Deemed Supply
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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
Schedule – 1 - Deemed Supply
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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.
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Schedule – 2 – Supply of Goods or Services
Transfer
Goods
Title Transfer
Title Transfer at future date
Service
Right / Undivided
Share but not Title
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Schedule – 2 – Supply of Goods or Services
Land & Building
Goods NIL
Service
Lease, Tenancy, Easement,
Licence to occupy land
Lease, Letting out of Building (Commercial / Residential) – Wholly
/ Partly
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Schedule – 2 – Supply of Goods or Services
Treatment / Process
To other Persons Goods Service
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Schedule – 2 – Supply of Goods or Services
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
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Schedule – 2 – Supply of Goods or Services
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
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Schedule – 2 – Supply of Goods or Services
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
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Schedule – 2 – Supply of Goods or Services
Composite Supply of Services
Works Contract
Sec 2 (119)
Supply by way of or part of – Food or Drink
(other than liquor)
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Schedule – 2 – Supply of Goods or Services
“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;
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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.
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Schedule – 3 – Neither Supply of Goods / Services
Employee Services
TO
Employer
Under Contract of Employment
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Schedule – 3 – Neither Supply of Goods / Services
Services
BY
Court Tribunal
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Schedule – 3 – Neither Supply of Goods / Services
Member of Parliament
Member of Legislative Assembly
Constitutional Capacity
Member of Panchayat /
LA
Services
BY
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Schedule – 3 – Neither Supply of Goods / Services
•Funeral, Burial, Crematorium, Mortuary
•Transportation of Deceased
Services of
•Actionable Claims other than
•Lottery
•Gambling
•Betting
Goods nature of
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Schedule – 3 – Neither Supply of Goods / Services
Sale of Land & Sale of Building
Subject to Schedule II
Para 5
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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
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Schedule – 3 – Neither Supply of Goods / Services
8. (a) Supply of warehoused goods to
any person before clearance for home
consumption;
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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
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Schedule – 3 – Neither Supply of Goods / Services
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.
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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
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Schedule – 3 – Neither Supply of Goods / Services
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.
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Schedule – 3 – Neither Supply of Goods / Services
Alcoholic Liquor License from
government
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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
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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
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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?
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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.
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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
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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.
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Exemptions
Exemptions
Section 11 of CGST Act
Section 6 of IGST Act
Goods Services
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Nature of Exemptions
Exemptions
Whole
Partial Conditional
Unconditional
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Types of Supply
◼Taxable Supply
◼Zero Rated Supply
◼Exempted Supply
◼Not Taxable Supply
◼Nil Rated Supply
◼Non GST Supply
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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