Supply Includes Without Consideration - Para 1 of Schedule I Read with Section 7(1)(c) - GST Ready Reckoner - GST

Supply Without Consideration shall be considered as Supply - Para 1 of Schedule I - As per section 7(1)(c) , the activities specified in Schedule I, made or agreed to be made without a consideration shall be considered as supply. Accordingly, Schedule I to the CGST Act contain the certain activities or transaction specified in, made or agreed to be made without a consideration, have also been include in the definition of Supply . Para 1 - Permanent transfer or disposal of business assets where input tax credit has been availed on such assets. Permanent Transfer implies that the goods should be transferred without any intention or requirement of having to receive the goods back. Disposal which is permanently getting rid of sometime that is no longer wanted or need. Temporary transfers are not included here. The term Business Assets includes Fixed Assets and Current Assets There must be transfer of ownership in respect of business assets. This para should be read along with section 18(6) of the CGST Act, read with rule 40 and read with section 15 for determining the transaction value of capital goods. Transfer of a business assets without consideration will attract GST only in respect of those goods where ITC has been availed. This clause also read with clause 4(c) of schedule II, which state that transfer of business as going concern is not a supply, thus transfer of entire business as a going concern cannot be subject to GST. As per Education Guide issued as 12th Jun 2012 define the meaning of t he term 'transfer of a going concern' As per para 7.11.15 - Transfer of a going concern means transfer of a running business which is capable of being carried on by the purchaser as an independent business, but shall not cover mere or predominant transfer of an activity comprising a service. Such sale of business as a whole will comprise comprehensive sale of immovable property, goods and transfer of unexecuted orders, employees, goodwill etc. Since the transfer in title is not merely a transfer in title of either the immovable property or goods or even both it may amount to service and has thus been exempted. 7.11.14 I am in the business of running a chain of restaurants. I intend to sell my business. Am I required to pay service tax? Services by way of transfer of a going concern, as a whole or an independent part thereof, are exempt from service tax. Therefore, you are not required to pay service tax on such sale of your business. Sale of assets of a business that has closed will be outside the definition of service CASE LAW M/S. Airports Authority India ( 2023 (4) TMI 959 - AAR, Rajasthan ) whether Supply or not - transfer of business or business assets In this case activity held is transfer of business as a going concern without consideration is supply of service which is exempt supply in light of Sl.No. 2 of Notification 12/2017 of CGST Act 2017 Further, as per section 17 read with rule 42 of CGST Rules, 2017, in case any registered person is having any exempted supplies, then ITC pertaining to such exempted supplies shall be reversed proportionately.