Scope of Supply Types of supply Levy of Tax

2. GST:
LEVY AND
COLLECTION OF TAX
Sarun Varghese FCA

3. Supply – Section 7
Composite Supply – Section 8
Mixed Supply – Section 8
Levy Of Tax – Section 9
 Q & A Session

5. All forms of supply of goods and/or services or both such as sale, barter,
exchange etc..
Activities specified in Schedule 1 – supplies made without consideration.
Activities specified in schedule 2 – supplies to be specifically treated as
supply of goods or supply of services.
Supply Includes:
Activities specified in schedule 3 – supplies which is neither supply of
goods nor supply of services.

6. • Supply of goods or services.
• Taxable person.
• Taxable territory.
• Consideration.
• In the course or furtherance of business

7. Particulars Explanations
Goods
Movable property other than money and securities but includes:
- Actionable claim,
- Growing crops, and
- Things attached to or forming part of the land
Not covered
1.Intangible properties
2. Securities
Services
Anything other than
- Goods
- Money
-Securities
Consideration
Something in return i.e, service recipient has to make any payment,
whether in money or otherwise.
Furtherance of Business
Activities are done entirely for business purpose and for the
continuation of same business in future.

9. LEASE

10. BARTER

11. EXCHANGE

12. SALES

13. Permission granted by competent authority to exercise certain privileges.
Without such authorization the activity would have constituted as an illegal act.
LICENSE

14. Periodical payment
for the use of
another property.
RENTAL

15. DISPOSAL – SCRAP SALES

16. SCHEDULE - I
Matters to be treated as Supply even if made without
consideration

17. Permanent Transfer of Business Assets
• Permanent transfer or sale of business assets on which input tax credit has been availed will
also be treated as supply even if there is no consideration received.
• “Permanent transfer” means transfer without any intention of receiving the goods back.
• It is applicable to the sale of business assets only. It does not apply to the sale of personal
land/building and other personal assets.
• Eg: A company is giving its used laptops or computers to a school or charitable
organization without any consideration.
• ITC to be reversed.

18. Supply of Goods via Agent
• By a principal to his agent and the agent will supply them on behalf of the
principal.
• By an agent to his principal when the agent receives these goods on behalf
of the principal.

19. Transactions between Related Persons
• Supply made between related persons for inadequate or no Consideration in
course or furtherance of business.

20. Who is a related person under GST?
• Director of one business is the director of another business.
• An employer and an employee.
• Any person holds at least 25% of shares in another company.
• They are under common control or management.
• The entities together control another entity.
• They are members of the same family.

21. Transactions between Related Persons
• Supply made between related persons for inadequate or no Consideration in
course or furtherance of business.
Eg: Eastern Condiments Inter Branch Stock Transfers.
• Exception: Relief has been given in a case where an employer gifts his
employee and the value of gift is less than Rs. 50,000. It is not considered as
Supply.

22. Taxable Person Importing Services From a
Related Person
• Import of services by a taxable person from a related person or from any of
his other establishments outside India, for business purposes, will be treated
as supply.
• Tax has to be paid by service receiver on RCM basis.
• Eg: Mwt company in kerala importing services from its related party
IHM Australia.

23. SCHEDULE - II
Activities to be specifically treated either as supply of
goods or supply of services

24. • Schedule II to the CGST Act contains the list of activities or transactions
which have been classified either as supply of goods or supply of service.
• For example, under works contract both sale of goods and provision of
service were involved and therefore taxable event under both the Statutes i.e.
respective VAT law and service tax law got imposed.

25. Sl.No Description of Supply Example
1 Transfer of the title in goods.
Sale of goods by one taxable
person to another.
2
Transfer of title in goods under an agreement and the
property in goods will pass at a future date upon payment
of full consideration.
Hire Purchase Agreement
3
Transfer/disposal of business assets, with or without
consideration.
Sale of office computer to
charitable organisation.
4
Goods forming part of the assets on ceasing to be a
taxable person.
Sale of all assets on winding up of
business.
5
Supply of goods by an unincorporated association/body
of persons (BOP) to its member.
Supply of food, gaming tools,
books etc. by Lions club to its
members.

26. Sl.No Description of Supply Example
1
Transfer of right in goods without the transfer of title. Renting a Cab
2
Any lease, tenancy, license to occupy land.
Leasing of land for a specified
period.
3
Any lease or letting out of the building for business or
commerce, either wholly or partly.
Rent Agreements
4
Any treatment or process which is applied to another person’s
goods.
XYZ ltd sent their tools to ABC
ltd for polishing.
5
Renting of immovable property Renting of Godown

27. Sl.No Description of Supply Example
6
Under the direction of a person carrying on a business,
making available of business goods for personal purpose.
Use of company guest house by
an employee for arranging a
personal function.
7
Development, design, programming, customisation,
implementation of information technology software.
ERP softwares
8 Works contract as defined in clause (119) of section 2.
Agreement for construction of
Building
9
Supply of goods being food or any other article for human
consumption except alcohol.
Restaurant Services

28. SCHEDULE - III
Activities to be treated neither as supply of goods nor
supply of services

29. • Services by Employee to Employer in the course of Employment.
• Services by Court & Tribunal under any Law for the time being in force.
• The function performed by Member of Parliament, State Legislature etc.
• Services by a foreign Diplomatic mission located in India.
• Services of a Funeral, Burial, crematorium, mortuary including transportation
of deceased.
• Actionable claims, other than lottery, betting and gambling.

30. FAQ
 ABC ltd, an insurance company disposes its old computers worth Rs.5000 to a charitable
organisation for free of cost -
- Supply of Goods
 H&M ltd purchased license key for its antivirus software in the office –
- Supply of Service
 L&T ltd, a construction company agreed to construct flat/villas for skyline group
(Works contract)
- Supply of services
 XYZ ltd, an automobile shop is winding up its business and decided to sell off all its assets
- Supply of Goods
Supply of Goods or Supply of Services?

31. (Section 8)

32. • Supply made by a taxable person.
• Comprises two or more taxable supplies of goods or services.
• Single price.
• And are naturally bundled.
• One of which is a principal supply.
• Taxed at the rate of Principal Supply

34. • Supply made by a taxable person.
• Comprises two or more taxable supplies of goods or services
or both, or any combination thereof.
• Single price.
• And are not naturally bundled.
• Highest rate of tax.

37. FAQ
Indus motors sells a brand-new vehicle along with registration, insurance
& free service.
- Composite supply
PNV agencies, a home appliance seller sells a refrigerator along with 2
bottles of water
- Mixed Supply
Anns bakers sells a combo pack of sweets, chocolates, cakes & dry fruits
of various brands for Rs.500
- Mixed Supply

41. UNDER FORWARD CHARGE

42. “Reverse charge” means the liability to pay tax is by the recipient of supply
of goods or services instead of the supplier of such goods or services.

43. UNDER REVERSE CHARGE
Mr.B (Reciever) Mr.A (Supplier)

45. • Section 9 (3) of CGST Act
• Registered service recipient liable to pay GST.
• Exception: where the value of such supplies is less than
Rs 5,000.

46. Description of supply of Goods Supplier of goods Recipient of goods
Cashew nuts, not shelled or peeled. Agriculturist. Any registered person.
Bidi wrapper leaves (tendu). Agriculturist. Any registered person
Tobacco leaves. Agriculturist. Any registered person.
Silk yarn.
Any person who manufactures silk
yarn from raw silk or silk worm.
Any registered person.
Raw cotton. Agriculturist Any registered person.
Supply of lottery.
State Government, Union Territory
or any local authority.
Lottery distributor or selling agent.
Used vehicles, seized goods, old and
used goods, waste and scrap.
Central Government, State
Government, Union territory or a
local authority.
Any registered person.

47. Description of supply of Service Supplier of service Recipient of service
Any service supplied by any person who
is located in a non-taxable territory to
any person in taxable territory.
Any person located in a non-taxable
territory
Any registered person in taxable
territory.
GTA Services.
Goods Transport Agency (GTA) who has
not paid integrated tax at the rate of 12%.
Any registered person.
Legal Services by advocate.
An individual advocate including a senior
advocate or firm of advocates.
Any business entity located in the
taxable territory.
Services supplied by an arbitral tribunal
to a business entity.
An arbitral tribunal.
Any business entity located in the
taxable territory.
Services provided by way of
sponsorship to any body corporate or
partnership firm.
Any person.
Any body, corporate or
partnership firm located in the
taxable territory.

48. Description of supply of Service Supplier of service Recipient of service
Services supplied by a director of a
company or a body corporate to the said
company or the body corporate.
A director of a company or a body
corporate.
The company or a body corporate
located in the taxable territory.
Services supplied by an insurance agent to
any person carrying on insurance business.
An insurance agent.
Any person carrying on Insurance
business, located in the taxable
territory.
Services supplied by a person located in
non- taxable territory by way of
transportation of goods by a vessel from a
place outside India up to the customs
station of clearance in India.
A person located in Non-taxable territory.
Importer, as defined in clause (26) of
section 2 of the Customs Act,
1962(52 of 1962), located in the
taxable territory.
Supply of services by an author, music
composer, photographer, artist or the like
by way of transfer or permitting the use or
enjoyment of a copyright covered under
section 13(1).
Author or music composer,
photographer, artist, or the like.
Publisher, music company, Producer
or the like, located in the taxable
territory.
Supply of services by the members of
Overseeing Committee to Reserve Bank of
India.
Members of Overseeing Committee
constituted by the Reserve Bank of India.
The Reserve Bank of India .

49. Description of supply of Service Supplier of service Recipient of service
Services supplied by the Central Government,
State Government, Union territory or local
authority to a business entity excluding, -
Central Government, State
Government, Union territory or local
authority
Any business entity located in
the taxable territory
(1) renting of immovable property, and
(2) services specified below-
(i) services by the Department of Posts
provided to a person other than Governments
(ii) services in relation to an aircraft or a vessel,
inside or outside the precincts of a port or an
airport;
(iii) transport of goods or passengers.
Services provided by business facilitator (BF) to
a banking company (01.09.2019)
Business facilitator (BF) A banking company, located in
the taxable territory
Services of lending of securities under
Securities Lending Scheme, 1997 (01.09.2019)
Lender i.e. a person Borrower of the securities under
the Scheme through an approved
intermediary of SEBI.

51. • E commerce operator has to collect and pay GST for the services thus
supplied.
• In case the electronic commerce operator does not have a physical
presence in the taxable territory, person representing such an e-commerce
operator shall be liable to pay the tax.
Mr. A Mr. B
GST to Govt