Concept of Supply under GST and its Types

The concept of supply under GST is a fundamental aspect that determines whether a transaction is taxable. GST (Goods and Services Tax) is levied on the supply of goods, services, or both, and the term "supply" has a broad and inclusive definition to ensure comprehensive taxation.

1. Concept of Supply under GST Presented by Dr. T. KANIMOZHI Assistant Professor PG and Research Department of International Business Sri Ramakrishna College of Arts & Science Coimbatore.

2. Supply under GST Definition of Supply under GST (Section 7 of CGST Act, 2017) Under the GST (Goods and Services Tax) Act , supply is broadly defined as the provision of goods or services or both , made for consideration in the course or furtherance of business. It includes activities such as sale, transfer, barter, exchange, license, rental, lease, or disposal .

3. concept of supply under GST The concept of supply under GST is a fundamental aspect that determines whether a transaction is taxable. GST (Goods and Services Tax) is levied on the supply of goods, services, or both, and the term "supply" has a broad and inclusive definition to ensure comprehensive taxation.

4. Supply includes: All forms of supply for consideration: Such as sale, transfer, barter, exchange, license, rental, lease, or disposal of goods or services in the course of business or furtherance of business. Importation of services for consideration: Even if not in the course or furtherance of business.

5. Activities specified in Schedule I: Deemed supplies even without consideration, including: Permanent transfer/disposal of business assets where ITC was availed. Supply between related persons or distinct persons (e.g., branches in different states). Supply of goods by a principal to an agent or vice versa. Import of services from a related person or establishment outside India.

6. Activities specified in Schedule II: Classification of certain activities as goods or services, e.g.: Renting of immovable property (service). Transfer of the right to use goods (service). Construction of buildings for sale (service if no completion certificate is issued).

7. Activities that do not constitute supply (Schedule III): Examples: Services by an employee to an employer. Services of MPs, MLAs, etc. Sale of land and completed buildings.

8. Key Elements of Supply Supply must be taxable under GST laws. Involves two or more parties (except in self-supplies like distinct persons or related persons). Consideration is usually required , except for Schedule I supplies. Should be in the course or furtherance of business , except in specified cases like import of services for personal use.

9. Types of Supply Taxable Supply: Subject to GST at applicable rates (e.g., sale of goods, services). Exempt Supply: Includes goods or services that are exempt from GST. Zero-Rated Supply: Includes exports and supplies to SEZ, where GST is not charged but input tax credit (ITC) is available. Composite Supply: Two or more supplies naturally bundled together, taxed as the principal supply. Example: Hotel room with complimentary breakfast (room is principal supply). Mixed Supply: Two or more supplies sold together but not naturally bundled, taxed at the highest applicable rate. Example: Gift hampers with chocolates and perfumes.

10. Importance of Supply in GST Taxability Basis: Supply determines whether a transaction is subject to GST. Broad Scope: Includes most economic transactions to minimize tax evasion. Compliance Clarity: Proper classification of supply helps businesses charge, collect, and remit GST correctly.