Taxable event under GST Law is “Supply of Goods & Services or both”. The definition is inclusive.
There are six parameters which can be adopted to characterize a transaction as supply. They are as given below:
- Supply of goods or services (supply of anything other than goods or services does not attract GST);
- Supply should be made for a consideration;
- Supply should be made in the course or furtherance of business;
- Supply should be made by a taxable person;
- Supply should be a taxable supply;
- Supply should be made within the taxable territory.
However, Schedule-I specifies certain activities which are treated as ‘supply’ even when made or agreed to be made without consideration. For example – permanent transfer or disposal of business assets where input tax credit is availed on such assets without consideration is treated as ‘Supply’.
Schedule II declares certain activities as supply of goods or supply of services. For example – Transfer of title in goods would be a supply of goods whereas any transfer of right in goods without transfer of title of services would be a supply of service.
Schedule III specifies certain activities that are not neither treated as supply of goods or supply of services. For example – Service by an employee to the employer in the course of or in relation to his employment, services of funeral, burial, crematorium, sale of land, actionable claims etc.
Import of services for a consideration, whether or not in the course or furtherance of business is treated as ‘Supply’.
Securities and Money are excluded from the definition of “good’ or ‘service’.
he term, ‘Consideration’ is defined. It can be in cash or kind. Subsidy given by Governments not considered as a consideration. It is immaterial whether payment is made by the recipient or any other person.
A deposit given in respect of supply of goods or services is not a consideration until the supplier applies the same as consideration for the said supply.
Where there is a barter of goods of services, the same activity constitutes supply for a consideration.
GST is a tax on commercial transactions. Hence, supply in the course or furtherance of business qualify as supply under GST. Hence, any supply made by an individual in his personal capacity do not come under the ambit of GST unless it is covered by the definition of the term, ‘Business’ in the Act.
Supply between two non-taxable persons does not constitute a ‘Supply’. The term, ‘taxable person’ is defined as a person registered or liable to be registered under Section 22 or 24 of the Act. Hence, even an unregistered person who is liable to be registered is a ‘taxable person”.
GST is attracted on ‘Supply’ made in the taxable territory. Hence, the place of supply should be India to attract GST.