The taxable event under GST shall be the supply of goods or services or both 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’.
What is the scope of ‘supply’ under the GST law?
The term ‘supply’ is wide in its import covers all forms of supply of goods or services or both that includes 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.
What are the necessary elements that constitute supply under CGST/SGST Act?
In order to constitute a ‘supply’, the following elements are required to be satisfied, i.e.-
- the activity involves supply of goods or services or both;
- the supply is for a consideration unless otherwise specifically provided for;
- supply is made in the course or furtherance of business;
- The supply is made in the taxable territory; and
- The supply is made by a taxable person.
What do you mean by “supply made in the course or furtherance of business”?
“Business” is defined under Section 2(17) include any trade, commerce, manufacture, profession, vocation etc. whether or not undertaken for a pecuniary benefit. Business also includes any activity or transaction which is incidental or ancillary to the aforementioned listed activities. In addition, any activity undertaken by the Central Govt. or a State Govt. or any local authority in which they are engaged as public authority shall also be construed as business. From the above, it may be noted that any activity undertaken included in the definition for furtherance or promoting of a business could constitute a supply under GST law.
What are the different types of supplies under the GST law?
- Taxable and exempt supplies
- Inter-State and Intra-State supplies
- Composite and mixed supplies and
- Zero rated supplies.