The supply is a Heart of GST. The supply is a taxable event which leads to the generation of Income to the Government. supply of Goods and Services are noticed in our daily life like the supply of Milk, Supply Goods, Providing Services, ..etc. Here we designed agenda related to Taxable Event In the Pre GST Regime and GST Regime Supply. We discuss the Definition of Supply Related to General Rule of Supply, Supply In Case of Important of Service and Supply Under Schedule 1.
The Goods and Service Tax is broadly Classified into Three Categories they are SGST, CGST When the transaction is related to the Intra State Supply Only. If the Transaction between the Two States Then SGST and IGST are implemented For Calculation of Tax Amount.
Taxable Event:- The Happening of Which Triggers the changeability of the Tax. That means as soon as the Taxable event takes place the related law Applies and The Respective Compliance Becomes Due Under GST The Taxable Event is SUpply of Goods or Services or Both.
Supply Of Service Under GST With Examples
The Supply Includes All forms of Supply of Goods or Services or Both which are movable goods but does not includes Money and Securities. The type of Supplies Such as Sale, Transfer, Barter Exchange, Licence, Rental, Lease …etc. Whatever the Transaction or Event will lead to the Furtherance of Business and Consider for the Taxable Event.
Definition of Supply U/S 7
Import of Services For a Consideration whether or not in the lead or course of furtherance of business may be considered as Supply of Services. Schedule 2 provides the Activities of the Supply of Goods or Supply of Services. Activities to be considered as Non-Supplies are listed in Schedule 3.
Supply as A General Rule:-
- It is a Form of Supply. Some of the Examples are given in the Definition.
- The Act of Supply May is the Present event or future Event.
- The Act of Supply Must be For Consideration.
- Act of Supply Must be Made by a Person.
- The Act of Supply Must be Done in the course or Furtherance of Business.
Various Forms of Supply
Sale:- When the Property in Goods Passes From one Person to the Other Sales take Place. For Example:- A sells goods to B. In This Case A is a supplier of Goods to B For a Consideration in the course of Business.
Transfer:- Passing the Possession of the Goods by one person to the Other Person. For Example- Shashidhar Handovers His Bike Keys to Akash. Then we treated as Simple act transfer of Goods from one person to another person.
Barter:– Exchange of goods and Service without money for the value of the products. For Example Exchange of Rice to someone with respect of Wheat.
Exchange:- Usually The Expressions of Barter and Exchange are used Interchangeably. However, Exchange Carriers a Wider Meaning and Denotes an act of Exchange whether equal or not.
CA Intermediate GST Short Notes
License:- An Act of Authorizing the Other Person to use the Specified Property or Engage in an activity or Occupation ..etc. For Example, An Accounting Software is giving license to use the software for business people with the amount of charging Rs 5000.
Rental:- Amount Paid or Received as Rent which related to an activity that of renting anything which may be a movable or Immovable, Intangible Property or any other thing. For Example, Saketh Ltd gives a Car rent to Mohan For Rs 2500 Per Month. This is treated as Rental Activity.
Lease:- Refers to a Contract Providing use or Occupation of Property During a Specified Period in Exchange For a specified Rent or Other Form of Payment. For Example, a shop is leas out for 10 Years of Term Period with the annual payment of Rs 1 Lakh Rupees.
Disposal:- Denotes the Act or Process of Getting ride of Something in the Present Context. It May have reference to a situation when some person does away with an asset or Scrap ..etc. For Example, H Saket Ltd Sells off a truck which was not in use because of its condition this is an act of disposal of an asset.
Supply May be Present or Future Event
The Definition of Supply Covers the act of Supply Made or Agreed to be Made this Reflects that not only a Present act may give rise to a taxable situation But an agreement for doing such as act in future may also give rise to a taxable event of Supply. For Example, Raghu Agreed to sells the goods For rs 4800 on a Future Date. Although Hari has not sold the goods But agreed to supply the goods on a future date for consideration and the activity is in the course of business is treated as Supply.
Supply Must Be For Consideration
A supply will Constitute a Supply For the Purposes of GST only when it is coupled with Consideration. If there is no Consideration the activity will not be treated as constitute Supply.
What is Consideration U/S 2(31) of the CGST Act:-
Consideration In Reference To The Provision Of Products or Services or Each Includes:-
Any Payment created or to be created whether or not in cash or otherwise in respect of in response to or for the Inducement of the availability of products or Services or each Whether by the Recipient or by other Person but Shall not Include any Subsidy given by the State and Central Government.
Point of Taxation Under GST For Services
The Monetary value of Any act or forbearance 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 subsidy given by the central government or 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.
Place of Supply of Services In GST With Example
- Consideration may be Past Present or Future
- Consideration may be in Money or in Some other Form.
- Download Consideration must be in response to the inducement of Supply.
- Consideration may flow from the Recipient of Supply of Some other Person.
- Consideration shall not include any subsidy given by the government.
Supply Must be Made by a Person
Whenever supply is made it will always be made by a person. Such a person may be a natural person or an artificial person like a company or Society ..etc.
Under the former tax regimes, There was a requirement of two different persons to constitute an act of sale of goods or supply of service. Thus the earlier legislation included the expressions “by One Person to the Other”.
Supply As Per GST Rules With Examples
But in the GST Law, The Definition explains about the Supply by a person There is no mention about the second party to whom supply can be made. Thus in the GST Regime, A supply by one unit of a person to its other unit may also constitute a supply if these two units have different GST Registration Numbers. For Example, MVK has his two Branches. One is located in New Delhi and other in Mumbai. Both Units have different registration GST numbers. The unit located in New Delhi transfer goods to the unit located in Mumbai. In this case even it the Same person ARX is transferring goods from its one unit to the other still it will be considered as Supply.
Supply must be Done in the Course of Furtherance of Business
One of the Essential Ingredients of Supply Under the GST Law is that the Supply should be made in the course or Furtherance of Business. This infers that it is only the Commercial transactions which are intended to be covered under the definition of Supply for the Purpose of taxation.
The Expression Business has been defined in section 2(17) of the CSGST Act and Includes not only an activity of trade or Commerce and the like but also includes adventure of the wager or other similar activities whether or not for pecuniary purposes. For Example:- A Company is organizing a treasure hunt in which the first person who completes the task wins a cash prize of RS 10000. Here all the conditions relating to supply are present. Therefore it will be considered as a supply.
In practical judging about the Particular transaction is an inter or Intrastate is not an easy Task like Online training Course which we can learn anywhere from the world. How can they charge the Inter or Intra State Tax on Services? To deal with these type of situations the IGST Act lays down related to Inter or intrastate transactions.
Brief Overview of Time Place and Value of Supply
Time of Supply:- It means a point of Time when the Goods or Services are considered Supplied. The Seller needs to Payment of Taxes on Due Date of the Supply of Taxation and Upload the Bills Due date of the Taxation.
Place of Supply:- The Place of Supply is necessary to identify the Transaction is taking place within the State or Between the Two States. Within the State Related transaction, we consider the SGST and CGST. Between two States SGST and IGST.
Value of Supply:- The Value of Supply means product or Service value which is necessary to the calculation of the Taxation depends upon the value of the Product. Through this can also verify the Bills and Vouchers for Correct and Incorrect Information.