Meaning & Scope of Supply under GST (Section 3) (Model Law)

One Country! One Market! One Tax! One Page! Follow www.facebook.com/GSTACT2016/ By Saurabh Chhabra (Founder and Admin) www.linkedin.com/in/saurabhchhabratax Day 3: #Meaningandscopeofsupply #Section3 Hi All, Coming back to charging section (Refer Day 1 #chargingsection) which says GST (CGST/SGST) will be charged on Supply of Goods & Services, it is important to understand the term ‘Supply’ which has been defined in Section 3 as Follows : Sub-Section (1) Supply includes: (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, (b) Importation of service, whether or not for a consideration and whether or not in the course or furtherance of business, and (c) a supply specified in Schedule I, made or agreed to be made without a consideration. Explanation by Admin (SC): The law provides an inclusive definition of supply as follows:  All forms of Supply of goods and/or services  Importation of Services (even for personal purpose, remember RCM will apply over and above a particular limit refer Day 2 #Taxableperson), further consideration may or may not be there (Valuation will be as per valuation rules)  a supply specified in Schedule I (MATTERS TO BE TREATED AS SUPPLY WITHOUT CONSIDERATION) Here are those matters: (These will be treated as supply of Goods/Services) 1. Permanent transfer/disposal of business assets. 2. Temporary application of business assets to a private or non-business use. 3. Services put to a private or non-business use. 4. Assets retained after deregistration. 5. Supply of goods and / or services by a taxable person to another taxable or nontaxable person in the course or furtherance of business. Provided that the supply of goods by a registered taxable person to a job-worker in terms of section 43A shall not be treated as supply of goods (we will deal with section 43A latter) If the above supplies fulfill the charging section and not exempt otherwise, these will be chargeable to GST (CGST/SGST) Sub-Section (2) Schedule II (MATTERS TO BE TREATED AS SUPPLY OF GOODS OR SERVICES), in respect of matters mentioned therein, shall apply for determining what is, or is to be treated as a supply of goods or a supply of services. Explanation by Admin (SC): Schedule II carries declared goods & Services, currently declared services are defined under Section 66E of Finance Act, 1994. Similar list is now included in Schedule II. One Country! One Market! One Tax! One Page! Follow www.facebook.com/GSTACT2016/ By Saurabh Chhabra (Founder and Admin) www.linkedin.com/in/saurabhchhabratax Sub-Section (2A) where a person acting as an agent who, for an agreed commission or brokerage, either supplies or receives any goods and/or services on behalf of any principal, the transaction between such principal and agent shall be deemed to be a supply. Explanation by Admin (SC): Intermediary of Goods & Services transacting for commission or brokerage, such transaction will also be deemed as supply & GST will be levied on such commission or Brokerage Sub-Section (3) Subject to sub-section (2), the Central or a State Government may, upon recommendation of the Council, specify, by notification, the transactions that are to be treated as— (i) a supply of goods and not as a supply of services; or (ii) a supply of services and not as a supply of goods; or (iii) neither a supply of goods nor a supply of services. Explanation by Admin (SC): The Government has retained its rights to declare any Supply as supply of Goods or Supply of Services or neither a supply of Goods nor a supply of Services to remove any ambiguity at the later stage. Sub-Section (4) Notwithstanding anything contained in sub-section (1), the supply of any branded service by an aggregator, as defined in section 43B, under a brand name or trade name owned by him shall be deemed to be a supply of the said service by the said aggregator. Explanation by Admin (SC): The same aggregator concept as currently applicable under service Tax law has been retained in the upcoming #GSTLaw Learn GST on Facebook like www.facebook.com/GSTACT2016/ Benefits of following this page are as follows: - Daily News on ‪#‪GST‪ - Learn one section of ‪#‪Modelgstlaw‪ daily - Relevant video's on #GST are also shared - Relevant Tweets - Govt action plan for #GST - Real-time updates from parliament and Industry on #GST Follow Now @GSTACT2016 Regards Saurabh Chhabra Founder and Admin www.facebook.com/GSTACT2016/ (Simplifying GST Learning)