Ans. The taxable event under GST shall be the supply
of goods and / or services made for consideration in the
course or furtherance of business. The taxable events under
the existing indirect tax laws such as manufacture, sale, or
provision of services shall stand subsumed in the taxable
event known as ‘supply’.
Ans. The term ‘supply’ is wide in its import and includes
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. It also includes
import of service. The model GST law also provides for
including certain transactions made without consideration
within the scope of supply.
Ans. A ‘taxable supply’ means a supply of goods and / or services which is chargeable to good and services tax under the GST Act.
Ans. In order to constitute a ‘supply’, the following elements are required to be satisfied, i.e.-
(i) supply of goods and / or services;
(ii) supply is for a consideration;
(iii) supply is made in the course or furtherance of business;
(iv) supply is made in the taxable territory;
(v) supply is a taxable supply; and
(vi) Supply is made by a taxable person.
Ans. Yes. Under certain circumstances such as importation
of service (Section 3(1) (b)) or supplies made without
consideration, specified under Schedule-I of MGL, where
one or more ingredients specified in answer to question no.
4 are not satisfied, it shall still be treated as supply under
Ans. Importation of goods is dealt separately under
the Customs Act, 1962, wherein IGST shall be levied as
additional duty of customs in addition to basic customs duty.
Ans. Inter-state self-supplies such as stock transfers will
be taxable as a taxable person has to take state wise
registration in terms of Schedule 1(5). Such transactions
have been made taxable even if there is no consideration.
However, intra-state self-supplies are not taxable.
Ans. Title as well as possession both have to be transferred
for a transaction to be considered as a supply of goods.
In case title is not transferred, the transaction would be
treated as supply of service in terms of Schedule II (1). In
some cases, possession may be transferred immediately
but titled may be transferred at a future date like in case
of sale on approval basis or hire purchase arrangement.
Such transactions will also be termed as supply of goods.
Ans. No definition or test as to whether the activity is in the course or furtherance of business has been specified under the MGL. However, the following business test is normally applied to arrive at a conclusion whether a supply has been made in the course or furtherance of business:
1. Is the activity, a serious undertaking earnestly pursued?
2. Is the activity is pursued with reasonable or recognisable continuity?
3. Is the activity conducted in a regular manner based on sound and recognised business principles?
4. Is the activity predominantly concerned with the making of taxable supply for consideration/ profit motive?
The test may ensure that occasional supplies, even if made for consideration, will not be subjected to GST.
Ans. No, because supply is not made by the individual in
the course or furtherance of business. Further, no input
tax credit was admissible on such car at the time of its
acquisition as it was meant for non-business use.
Ans Yes. As per Schedule-I (1) business assets put to a
private or non-business use without consideration will be
treated as supply.
Ans. Yes. Provision of facilities by a club, association,
society or any such body to its members shall be treated
as supply. This is included in the definition of ‘business’ in
section 2(17) of MGL.
Ans. Inter-state and intra-state supplies have specifically
been defined in Section 3 & 3A of IGST Act respectively.
Broadly, where the location of the supplier and the place of
supply are in same state it will be intra-state and where it
is in different states it will be inter-state supplies.
Ans. Transfer of right to use goods shall be treated as
supply of service because there is no transfer of title in
such supplies. Such transactions are specifically treated as
supply of service in Schedule-II of MGL
Ans. Works contract and catering services shall be treated as supply of service as specified in Schedule-II of MGL.
Ans. Supply of goods on hire purchase shall be treated as supply of goods as there is transfer of title, albeit at a future date.