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Scope of SUpply

GST SUpply

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Scope of SUpply

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  1. GST – MEANING & SCOPE OF SUPPLY BY : CA RAMANDEEP SINGH BHATIA GSTIND GLOBAL SOLUTIONS LLP CA RAMANDEEP SINGH BHATIA Let us understand the GST

  2. COVERAGE OF SESSION

  3. Essentials of Tax – Landmark Judgment Supreme Court in Govind Saran Ganga Saran 1985 (Supp) If famously laid down the requirements that every tax in the country must follow. If a tax – any tax -  failed to lay down any of these requirements, it would be struck down by the Courts as illegal. CA RAMANDEEP SINGH BHATIA

  4. Flow of Transaction - GST Regime 1: Subject • Services • Goods • Goods as services 2: Supply Taxable Event • Included • Implied • Excluded 3: Place • Inter-State • Intra-State 4: Time • Specified for goods • Specified for services CA RAMANDEEP SINGH BHATIA

  5. SECTION -7 TAXABLE EVENT SUPPLY (Taxable Event) Goods & Services Consideration sale, transfer, barter, exchange, license, rental, lease or disposal in the course or furtherance of business SCH- I ACTIVITIES TO BE TREATED AS SUPPLY EVEN IF MADE WITHOUT CONSIDERATION SCH- III ACTIVITIES TREATED NEITHER AS A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES SCH- II TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES

  6. SEC. 7 : SCOPE OF SUPPLY SECTION 7. Scope of supply. — (1) For the purposes of this Act, the expression “supply” includes — (a) all forms of supply of goods or servicesor both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; CA RAMANDEEP SINGH BHATIA

  7. Goods- 2(52) “Goods” means every kind of movable propertyother 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;

  8. Actionable claim -2(1) “Actionable claim” shall have the same meaning as assigned to it in section 3 of the Transfer of Property Act, 1882 TP Act defines actionable claim to a claim: – To any debt other than a debt secured by mortgage of immovable property or by hypothecation or pledge of movable property – To any beneficial interest in movables not in possession actual or constructive of the claimant – Which the Civil Courts recognize as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional or contingent. CA RAMANDEEP SINGH BHATIA Let us understand the GST

  9. Service -2(102)-“SERVICES” (102) “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; How to proceed , weather a particular transaction is Goods or Service ? Check first – Is it Goods – if no Then it is Service. CA RAMANDEEP SINGH BHATIA Let us understand the GST

  10. SEC. 7 : SCOPE OF SUPPLY SECTION 7. Scope of supply. — (1) For the purposes of this Act, the expression “supply” includes — (a) all forms of supply of goods or services or both 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; CA RAMANDEEP SINGH BHATIA

  11. SEC. 7 : SCOPE OF SUPPLY SECTION 7. Scope of supply. — (1) For the purposes of this Act, the expression “supply” includes — (a) all forms of supply of goods or services or both 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; CA RAMANDEEP SINGH BHATIA

  12. (31) “CONSIDERATION” (31) “consideration” in relation to the supply of goods or services or both includes–– (a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidygiven by the Central Government or a State Government; (b) the monetary value of any act or forbearance, in respect of, in responseto, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government: Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply; CA RAMANDEEP SINGH BHATIA

  13. SEC. 7 : SCOPE OF SUPPLY SECTION 7. Scope of supply. — (1) For the purposes of this Act, the expression “supply” includes — (a) all forms of supply of goods or services or both 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; CA RAMANDEEP SINGH BHATIA

  14. In the course of Business : - Example CA RAMANDEEP SINGH BHATIA

  15. SALE – When there is no Business C.B.E. & C. Press Release No. 78/2017, dated 13-7-2017 Even though the sale of old gold by an individual is for a consideration, it cannot be said to be in the course or furtherance of his business (as selling old gold jewelery is not the business of the said individual), and hence does not qualify to be a supply per se. Accordingly the sale of old jewellery by an individual to a jeweler will not attract the provisions of Section 9(4) and jeweler will not be liable to pay tax under reverse charge mechanism on such purchases. However, if an unregistered supplier of gold ornaments sells it to registered supplier, the tax under RCM will apply. CA RAMANDEEP SINGH BHATIA

  16. Selling various spiritual products such as books, audio CDs, DVDs, statues and calendars for advancement of religious teachings - “Business” SHRIMAD RAJCHANDRA ADHYATMIK SATSANG SADHANA KENDRA 2019 (20) G.S.T.L. 779 (App. A.A.R. - GST) Charitable Trust - GST Registration - Public charitable and religious trust with main object of advancement of religious and spiritual teaching - Also selling various spiritual products such as books, audio CDs, DVDs, statues and calendars for advancement of religious teachings - “Business” as defined in Section 2(17) of Central Goods and Services Tax Act, 2017 wide enough to include trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activities - “Trade” covers activity of buying or selling or services between people - Sale of various goods and services to people desiring to buy them part of objective of trust apart from printing and publishing - It can dispose of also its property, buy and sell securities, sell trust property by public auction or let it out on lease, etc. - Activities of trade and commerce also form a major part of objectives of trust - Sale of goods and services for consideration and its various activities come within ambit of definition of ‘supply’ under Section 7 ibid - Supply of spiritual products like books, CDs and DVDs in nature of supply in the course of business - Assessee engaged in supply of goods and services liable to get itself registered .

  17. Circular No. 116/35/2019-GST, dated 11-10-2019 Donation is Suppy and taxable under GST ? Levy of GST on the service of display of name or placing of name plates of the donor in the premises of charitable organisations receiving donation or gifts from individual donors - Regarding. Individual donors provide financial help or any other support in the form of donation or gift to institutions such as religious institutions, charitable organisations, schools, hospitals, orphanages, old age homes etc. The recipient institutions place a name plate or similar such acknowledgement in their premises to express the gratitude. When the name of the donor is displayed in recipient institution premises, in such a manner, which can be said to be an expression of gratitude and public recognition of donor’s act of philanthropy and is not aimed at giving publicity to the donor in such manner that it would be an advertising or promotion of his business, then it can be said that there is no supply of service for a consideration (in the form of donation). There is no obligation (quid pro quo) on part of recipient of the donation or gift to do anything (supply a service). Therefore, there is no GST liability on such consideration.

  18. SEC. 7 : SCOPE OF SUPPLY 1[(aa) the activities or transactions, by a person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration. Explanation .-For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another;] 1. Inserted w.e.f. 01st July, 2017 by s. 108 of The Finance Act, 2021 (No. 13 of 2021) - Brought into force on 01st January, 2022 vide Notification No. 39/2021-C.T., dated 21st December, 2021.

  19. SEC. 7 : SCOPE OF SUPPLY SECTION 7. Scope of supply. — (1) For the purposes of this Act, the expression “supply” includes — (b) import of services for a consideration whether or not in the course or furtherance of business; [and] CA RAMANDEEP SINGH BHATIA

  20. SEC. 7 : SCOPE OF SUPPLY SECTION 7. Scope of supply. — (1) For the purposes of this Act, the expression “supply” includes — (c) the activities specified in Schedule I, made or agreed to be made without a consideration; [* * *] CA RAMANDEEP SINGH BHATIA

  21. SEC. 7(1)C: SCOPE OF SUPPLY CA RAMANDEEP SINGH BHATIA

  22. GIFTS TO EMPLOYEES C.B.E. & C. Press Release No. 73/2017, dated 10-7-2017 • Gifts to employees upto Rs 50,000/- not taxable under GST and no GST on perquisites and free housing provided to employees — ITC when available • The question arises as to what constitutes a gift. Gift has not been defined in the GST law. In common parlance, gift is made without consideration, is voluntary in nature and is made occasionally. It cannot be demanded as a matter of right by the employee and the employee cannot move a court of law for obtaining a gift. • Supply by the employer to the employee in terms of contractual agreement entered into between the employer and the employee, will not be subjected to GST. Further, the input tax credit (ITC) scheme under GST does not allow ITC of membership of a club, health and fitness centre [section 17(5)(b)(ii)]. It follows, therefore, that if such services are provided free of charge to all the employees by the employer then the same will not be subjected to GST, provided appropriate GST was paid when procured by the employer. CA RAMANDEEP SINGH BHATIA

  23. SEC. 7(1)C: SCOPE OF SUPPLY • Section 2(5) of the Act – “Agent means a person, including a factor, broker, commission agent, arhatia, del credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another”. • Section 2(88) of the Act – “Principal means a person on whose behalf an agent carries on the business of supply or receipt of goods or services or both”. CA RAMANDEEP SINGH BHATIA

  24. SEC. 7(1)C: SCOPE OF SUPPLY Explanation 1 to Section 8 of the IGST Act, 2017 which deems any establishment outside India as an establishment of a distinct person. By virtue of this treatment, all services received by a person in India from its branches / establishments located outside India would be considered to be a supply, even when made without consideration. CA RAMANDEEP SINGH BHATIA

  25. SUPPLY OF GOODS OR SUPPLY OF SERVICES AS REFERRED TO IN SCHEDULE II

  26. SUPPLY OF GOODS OR SUPPLY OF SERVICES AS REFERRED TO IN SCHEDULE II CA RAMANDEEP SINGH BHATIA

  27. SUPPLY OF GOODS OR SUPPLY OF SERVICES AS REFERRED TO IN SCHEDULE II CA RAMANDEEP SINGH BHATIA

  28. SUPPLY OF GOODS OR SUPPLY OF SERVICES AS REFERRED TO IN SCHEDULE II

  29. SUPPLY OF GOODS OR SUPPLY OF SERVICES AS REFERRED TO IN SCHEDULE II CA RAMANDEEP SINGH BHATIA

  30. SUPPLY OF GOODS OR SUPPLY OF SERVICES AS REFERRED TO IN SCHEDULE II CA RAMANDEEP SINGH BHATIA

  31. SUPPLY OF GOODS OR SUPPLY OF SERVICES AS REFERRED TO IN SCHEDULE II CA RAMANDEEP SINGH BHATIA

  32. SUPPLY OF GOODS OR SUPPLY OF SERVICES AS REFERRED TO IN SCHEDULE II

  33. SUPPLY OF GOODS OR SUPPLY OF SERVICES AS REFERRED TO IN SCHEDULE II

  34. SUPPLY OF GOODS OR SUPPLY OF SERVICES AS REFERRED TO IN SCHEDULE II CA RAMANDEEP SINGH BHATIA

  35. SEC. 7 : SCOPE OF SUPPLY (2) Notwithstanding anything contained in sub-section (1),–– (a) activities or transactions specified in Schedule III; or (b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council, shall be treated neither as a supply of goods nor a supply of services CA RAMANDEEP SINGH BHATIA

  36. SEC. 7 : SCOPE OF SUPPLY Inserted vide Notification No. 14/2017- Central Tax (Rate) dated 28.06.2017) • Services by way of any activity in relation to a function entrusted to Panchayat under Article 243G of the Constitution Clarified vide Circular No. 1/1/2017-IGST dated 07.07.2017 • The inter-State movement of goods like movement of various modes of conveyance, between ‘distinct persons’ as explained in this Chapter, including trains, buses, trucks, tankers, trailers, vessels, containers & aircrafts, carrying goods or passengers or both, or for repairs and maintenance, would also not be regarded as supplies except in cases where such movement is for further supply of the same conveyance . Clarified vide Circular No. 21/21/2017-GST dated 22.11.2017 Inter-State movement of jigs, tools and spares, and all goods on wheels like cranes, except in cases where movement of such goods is for further supply of the same goods, and consequently no IGST would be applicable on such movements CA RAMANDEEP SINGH BHATIA

  37. SEC. 7 : SCOPE OF SUPPLY (3) Subject to the provisions of sub-sections (1) and (2), the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as— (a) a supply of goods and not as a supply of services; or (b) a supply of services and not as a supply of goods. Ex. Schedule -II CA RAMANDEEP SINGH BHATIA

  38. SEC. 7 : SCOPE OF SUPPLY - SCHEDULE III ACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED NEITHER AS A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES 1. Services by an employee to the employer in the course of or in relation to his employment. Ex. Now : Article / Apprentices , Daily wage earner. 2. Services by any court or Tribunal established under any law for the time being in force. Explanation.—For the purposes of paragraph 2, the term "court" includes District Court, High Court and Supreme Court. 3. (a) the functions performed by the Members of Parliament, Members of State Legislature, Members of Panchayats, Members of Municipalities and Members of other local authorities;

  39. SEC. 7 : SCOPE OF SUPPLY- SCHEDULE III (b) the duties performed by any person who holds any post in pursuance of the provisions of the Constitution in that capacity; or (Ex. Consular post , Ambassador, President ) (c) the duties performed by any person as a Chairperson or a Member or a Director in a body established by the Central Government or a State Government or local authority and who is not deemed as an employee before the commencement of this clause. 4. Services of funeral, burial, crematorium or mortuary including transportation of the deceased. 5. Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building. 6. Actionable claims, other than lottery, betting and gambling 88a[specified actionable claims]. (Wef – 01-10-2023)

  40. ACTIONABLE CLAIM –GAMING INDUSTRY September 2023 May 2023

  41. SEC. 7 : SCOPE OF SUPPLY- SCHEDULE III 48/2023-Central Tax - Seeks to notify the provisions of the Central Goods and Services Tax (Amendment) Act, 2023 29-Sep-2023

  42. SEC. 7 : SCOPE OF SUPPLY- SCHEDULE III '(80A) "online gaming" means offering of a game on the internet or an electronic network and includes online money gaming; (80B) "online money gaming" means online gaming in which players pay or deposit money or money's worth, including virtual digital assets, in the expectation of winning money or money's worth, including virtual digital assets, in any event including game, scheme, competition or any other activity or process, whether or not its outcome or performance is based on skill, chance or both and whether the same is permissible or otherwise under any other law for the time being in force;’;

  43. SEC. 7 : SCOPE OF SUPPLY- SCHEDULE III '(102A) "specified actionable claim" means the actionable claim involved in or by way of— betting; casinos; gambling; horse racing; lottery; or online money gaming;’;

  44. SEC. 7 : SCOPE OF SUPPLY- SCHEDULE III Inserted Finance act 2019, made applicable from 1st Feb 2018 (Vide section 159 of the Finance Act, 2023 made effective from 01st July 2017) 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 8. (a) Supply of warehoused goods to any person before clearance for home consumption; (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.]

  45. THANKS Head Office: GSTIND GLOBAL SOLUTIONS LLP , 3rd Floor, B 35/5, Krishan Ranjan Building, Shailender Nagar, Raipur, (C.G.) 492001 Contact : +91-7000045500, gstindglobal@gmail.com www.gstindglobal.com Disclaimer: The views and opinions expressed in this article are those of the compiler and do not necessarily reflect the official policy or position of any agency/department of the government. The same should not be considered as legal advice in no case. All possible efforts are made to make the compilation error free and incase if there is any left , we regret for the same and request to point out the same at our mail id. GSTIND GLOBAL SOLUTIONS LLP , RAIPUR CA RAMANDEEP SINGH BHATIA Let us understand the GST

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