Supply of Goods and Services under Model GST Law
Supply of Goods and Services under Model GST Law (As per Revised GST Law amended on November 2016) brings the new concept in the indirect taxation, far away from manufacture (central excise), provision of service (service tax) or sale (value added tax). This concept will change the point of taxation from ‘origin’ to ‘destination’ and is thus a total ‘U-turn’ from the present day taxation regime.
Meaning of Supply [Section 2(f)]
The term Supply of Goods/Services under Model GST Law has been defined to mean the same as defined in section 3 of the CGST Act, 2016 which provides for meaning and scope of ‘supply’.
- This section provides for the meaning and scope of supply of goods and services. There is no concept of supply of goods and services in the present law either in Service Tax or Central Excise. In the proposed law, the supply of goods or services shall include the following:
(7) lease or disposal, and
(8) Importation of services
(9) Supply as per Schedule-I (supply without consideration)
In relation to ‘supply’ for the purpose of GST, following points may be noted –
(1) supply shall be goods and services
(2) supply should be made or agreed to be made
(3) supply should be a consideration
(4) supply should be made by the person
(5) supply should be made in the course of or furtherance of business
(6) supply shall include importation of service, for a consideration and whether or not in the course of or furtherance of business and
(7) Importation of services without consideration is out of the taxable net, except for following situations:-
(a) Importation of services by a taxable person from a related person, in the course or furtherance of business.
(b) Importation of services by a taxable person from any of his other establishments outside India, in the course or furtherance of business.
(c) Importation of services for personal use still continues to be considered as a supply
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 are 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 the supply of that particular supply which attracts the highest rate of tax.