Definition of Supply under GST, Meaning of Supply Under GST

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Definition of Supply under GST, Meaning of Supply Under GST. Unveiling of the model GST law has paved the way for a new buzz word called “Supply”, just like the taxable event for levy under Central Excise, Service Tax and Customs is Manufacture, Service and Import/Export respectively. This article is aimed at providing an insight on this new buzz word called “Supply”. Now check more details about “Definition of Supply under GST, Meaning of Supply Under GST” from below…

Definition of Supply under GST, Meaning of Supply Under GST

Definition of Supply under GST

Definition of ‘supply’ Under section 2(92) read with section 3 ‘supply’ includes all forms of supply of goods and/or services 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. Schedule I specified the supply.

Analysis: Supply is the term replaced for the term sale; no scope has been left for any confusion and the definition includes every term which shall be coined as sale. Even the supply which is made or agreed to be made without a consideration will also amount to sale.

Any transfer of title to goods is a supply of goods, transfer of right to use goods [section 4(8) of APVAT Act, 2005], Hire purchase transactions, transfer of business assets are also brought under the ambit of term ‘supply’ as per Schedule II.

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

(2) Schedule II, 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.

(3) Notwithstanding anything contained in sub-section (1),

  • (a) activities or transactions specified in schedule III; or
  • (b) activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities as specified in Schedule IV,

shall be treated neither as a supply of goods nor a supply of services.

(4) Subject to sub-section (2) and sub-section (3), the Central or a State Government may, upon recommendation 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; or
  • (c) neither a supply of goods nor a supply of services.

(5) The tax liability on a composite or a mixed supply shall be determined in the following manner —

  • (a) 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;
  • (b) a mixed supply comprising two or more supplies shall be treated as supply of that particular supply which attracts the highest rate of tax.

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