Presents the Taxable event of GST i.e. SUPPLY. This presentation tries to explain different parameters of 'Supply' for GST purposes.

1. Taxable Event ‘SUPPLY’ of Goods & Services
By
Dr. Mohmed Amin Mir
Assistant Professor
Department of Commerce & Management
Studies
Islamia College of Science & Commerce
(Autonomous with CPE Status)
Srinagar - 190002, Jammu & Kashmir, India

2. SUPPLY UNDER GST
 Under earlier indirect tax laws, there were two separate activities
i.e.
 Manufacture or sale of goods &
 Provision of services
 In the GST regime, entire value of these two is taxed in an
integrated manner by laying down one comprehensive taxable
event i.e. “SUPPLY”
 SUPPLY – Supply of goods or services or both & refers to a broad
term which merges all taxable activities of the earlier laws into a
single activity
 Now, there are two modes of supply which may attract GST i.e.
 Supply of Goods
 Supply of Services
 Under GST, the supply should be of goods or services
 Supply of anything other than goods or services does not attract
GST
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3. FORMS OF SUPPLY
 Under GST, supply includes all forms of supply of goods or services or both
 Concept of ‘Supply’ is the key stone of the GST architecture because the supply of anything
other than goods or services does not attract GST
 Two Forms of Supply:
 GOODS &
 SERVICES
GOODS
 Means every kind of movable property other than money & Securities but includes
actionable claim, growing cops, grass and things attached to or forming part of the land
which are agreed to be severed before supply or under a contract of supply [Sec-2 (52) of
CGST Act, 2017]
 ACTIONABLE CLAIM: Means a claim to any debt, other than a debt secured by mortgage of
immovable property or by hypothecation or pledge of movable property or to any beneficial
interest in movable property not in the possession, wither actual or constructive, of the
claimant, which the civil courts recognise as affording ground for relief, whether such debt
or beneficial interest be existent, accruing, conditional or contingent
 MONEY: Means the Indian legal tender or any foreign currency, cheque, promissory note,
bill of exchange, letter of credit, draft, pay order, travelling cheque, money order, postal or
electronic remittance or any other instrument recognised by the RBI when used as a
consideration to settle an obligation or exchange with Indian legal tender of another
denomination but shall not include any currency that is held for its numismatic value
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4. FORMS OF SUPPLY
SERVICE
 Means anything other than Goods, Money &
Securities but includes activities related to the
use of money or its conversion by cash or by
any other mode, from one form (currency or
denomination) to another form (currency or
denomination) for which a separate
consideration is charged [Sec-2 (102) of CGST
Act, 2017]
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5. PARAMETERS OF SUPPLY
Sec-7 (1) (a) clearly specifies the following parameters which can be
adopted to characterize a transaction as supply:
1. It should be supply of goods or services only
2. The supply should be made for a consideration
3. The supply should be made in the course or furtherance of
business
4. It should be made by a taxable person
5. It should be a taxable supply
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6. EXCEPTIONS TO THE PARAMETERS OF SUPPLY
There are few exceptions to some of aforesaid parameters of taxable
supply:
I. ‘CONSIDERATION’ Parameter
 There are few cases in SCHEDULE- I of CGST Act, 2017 where the supply is
considered even if the same is without consideration
II. ‘COURSE OR FURTHERANCE OF BUSINESS’ Parameter
 The Import of Services for a consideration (even for personal use),
whether or not in the course or furtherance of business, shall be treated
as Supply
III. ‘ALL’ Parameters
b. There are few exceptional cases where the transaction is not treated as
supply despite of existence of all the parameters
c. A List of activities is given in Schedule-III [may be called as NEGATIVE
LIST OF SERVICES]
d. These transaction/activities shall be neither treated as Supply of Good nor
a Supply of Services
e. These are kept outside the scope of GST
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7. SCOPE OF SUPPLY [Sec-7(1)]
As per Sec-7 (1), Supply includes:
1. All forms of supply of goods or services or both 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
2. Import of services for a consideration whether or not in the
course or furtherance of business
3. The activities specified in SCHEDULE-I, made or agreed to be
made without a consideration and
4. The activities to be treated as supply of goods or supply of
services as referred to in SCHEDULE-II
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8. MODES OF SUPPLY [Analysis of Provisions of Sec-7(1)]
 The words ‘supply includes’ and ‘such as’ in the definition shows scope of supply has
been given in an inclusive manner
 List is not exhaustive
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a. Sale Transfer of ownership of goods
b. Transfer Transfer of goods/right in goods without transfer of title
c. Barter •Exchange of goods or services for another without money.
•Same activity constitutes supply as well as consideration
d. Exchange •Broader than barter
•A situation where goods are partly paid for in goods and partly in money
•Example: Old mobile phone is exchanged for a new one and some additional
cash has been paid
e. License A permission granted to exercise certain privileges
f. Lease Contract to allow right to use for a period without transfer of title
g. Rental •Periodical payment for the use of someone else’s property
•License, leases & rentals of goods with or without transfer of right to use are
covered under the SUPPLY OF SERVICE in GST [As per Schedule-II of CGST Act]
because there is no transfer of title in such supplies
h. Disposal To part with or alienate like disposal of waste

9. TYPES OF SUPPLIES
 Supply under GST may be of three types:
I. INDIVIDUAL SUPPLY
II. COMPOSITE SUPPLY
III. MIXED SUPPLY
INDIVIDUAL SUPPLY
 Supply of individual goods or individual services, which is clearly identifiable
 Such goods or services are subject to a particular rate of tax
 EXAMPLE: Sale of dry fruits, chocolates and cakes to a single person under one invoice is
individual supply, if these items are separately priced and have been identified and disclosed
COMPOSITE SUPPLY
 Means a supply made by a taxable person to a recipient consisting of two or more taxable
supplies of goods or services or both, or any combination thereof, which are NATURALLY
BUNDLED and supplied in conjunction with each other in the ordinary course of business ,
one of which is a PRINCIPAL SUPPLY
 EXAMPLE: Prakash buys LCD and also gets warranty and a maintenance contract with the
LCD. This Supply is a composite supply. The supply of LCD is the principal supply and
warranty/ maintenance services are ancillary
i. Should be supply made by taxable person to a recipient
ii. Should consist of two or more taxable supplies of goods or/services or both
iii. Combination should be naturally bundled & supplied in conjunction with each other in the
ordinary course of business
iv. Out of the two naturally bundled supplies, one should be a principal supply 8

10. TYPES OF SUPPLIES
MIXED SUPPLY
 A supply of more than one good and / or services as a bundle
will be reckoned as mixed supply if the following conditions
are fulfilled:
i. Such goods/ or services are supplied for a single price
ii. They are not naturally bundled together and
iii. It does not qualify as composite supply
 In case of mixed supplies, the goods / services which are
supplied to the recipient at one price can be supplied
individually i.e. the individual supplies are independent of
each other and are not naturally bundled
 EXAMPLE: A gift pack comprising of canned foods, sweets,
chocolates, cakes dry fruits, aerated drinks and fruit juices
supplied for a single price. It is an example of mixed supply
as all these goods can be sold independently
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11. TYPES OF SUPPLIES
Composite and Mixed Supply
Comprising two or more supplies of goods or services or any combination thereof
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Naturally Bundled
Comprising two or more
supplies, one of which is a
principal supply
Artificially Bundled
Comprising two or more
supplies, one of which is a
principal supply
COMPOSITE SUPPLY
MIXED SUPPLY

12. GOVERNMENT’S POWER OF CLASSIFICATION [Sec-7 (3)]
As per Sec- 7 (3),
“ Subject to the provisions of
 Sec- 7 (1) i.e. SCHEDULE-I, SCHEDULE-II, Import of services for
a consideration, & all forms of supply of goods or services or
both for a consideration in the course or furtherance of business
&
 Sec-7 (2) i.e. activities/transactions specified in SCHEDULE – III,
THE GOVERNMENT MAY, ON THE RECOMMENDATIONS OF THE
COUNCIL, SPECIFY, BY NOTIFICATION, THE TRANSACTIONS
THAT ARE TO BE TREATED AS:
a. A Supply of goods and not as supply of services or
b. A Supply of services and not as supply of goods
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13. SCHEDULE – I
ACTIVITIES TO BE TREATED AS SUPPLY EVEN IF MADE
WITHOUT CONSIDERATION
 In every tax statute, the consideration plays paramount
role for levy of taxes
 In following 4 cases, the supplies made even without
consideration will be treaded as Supply under Sec-7 of
the CGST Act
I. Permanent Transfer/ Disposal of Business Assets
II. Supply between Related person or Distinct persons
III. Supply of Goods by a Principal to his Agent
IV. Importation of Services
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