GST: Matters to be treated as Supply and not to be treated as Supply

GST or Goods and Services Tax is a comprehensive indirect tax that has been implemented in India since July 1st, 2017. Under GST, all supplies are categorized as either goods or services. However, there are certain matters that are considered as supply and others that are not considered as supply. Let's take a closer look at these matters.

What is considered as supply under GST?

Supply is a broad term that includes all forms of supply of goods and services such as sale, transfer, exchange, barter, rental, lease, or disposal. As per Section 7 of the CGST Act, 2017, the following matters shall be treated as supply:

Any form of transfer of goods for consideration, including sales, exchange, barter, lease, license or disposal
Any form of transfer of services for consideration, including rental, lease or disposal
The letting out of any property on hire, including the provision of services in relation to such letting out of property
The activities specified in Schedule I of the CGST Act, 2017, even if made without consideration

The activities specified in Schedule I of the CGST Act, 2017, include the following:

Supply of goods or services by a taxable person to another taxable or non-taxable person in the course or furtherance of business
Supply of goods or services by any person to a related person, other than in the course or furtherance of business
Supply of goods by a principal to his agent or vice versa, where the agent undertakes to supply or receive such goods on behalf of the principal
Import of services by a taxable person from a related person or from any of his establishments outside India, in the course or furtherance of business

It is important to note that any transfer of goods or services without consideration is not considered as supply under GST.

What is not considered as supply under GST?

The following matters shall not be treated as supply under GST, as per Schedule III of the CGST Act, 2017:

Services by an employee to the employer in the course of or in relation to his employment
Services by any court or tribunal established under any law for the time being in force
The functions performed by Members of Parliament, Members of State Legislature, Members of Panchayats, Members of Municipalities and Members of other local authorities
Services of funeral, burial, crematorium or mortuary including transportation of the deceased
Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building

Conclusion

In conclusion, understanding what is considered as supply and not considered as supply under GST is crucial for businesses to ensure compliance with GST laws. By adhering to these provisions, business owners can avoid any unnecessary penalties or legal action. It is important to seek professional guidance when it comes to GST compliance and matters related to taxation.