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TMI BlogGST - Definitions - An analysisX X X X Extracts X X X X X X X X Extracts X X X X ..... GST - Definitions - An analysis - By: - Balasubramanian Natarajan - Goods and Services Tax - GST - Dated:- 12-8-2016 - - Section Content Our Comments 2(6) (6) aggregate turnover means the aggregate value of all taxable and non-taxable supplies, exempt supplies and exports of goods and/or services of a person having the same PAN, to be computed on all India basis and excludes taxes, if any, charged under the CGST Act, SGST Act and the IGST Act, as the case may be; Explanation.- Aggregate turnover does not include the value of supplies on which tax is levied on reverse charge basis and the value of inward supplies. For determining the Threshold limit this is important. All India Turn over of both Goods and Services will be clubbed. For working out threshold limits for individual states how this will be applied is not clear 2(7) (7) agriculture with all its grammatical variations and cognate expressions, includes floriculture, horticulture, sericulture, the raising of crops, grass or garden produce and also grazing, but does not include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dairy farming, poultry farming, stock breeding, the mere cutting of wood or grass, gathering of fruit, raising of man-made forest or rearing of seedlings or plants; Explanation. For the purpose of this clause, the expression forest means the forest to which the Indian Forest Act, 1927 applies. Dairy Farming Poultry farming and stock breeding are not Agricultutre. Captive plantations raised by Pulp and Paper industry will not be treated as agri operations 2(17) (17) business includes (a) any trade, commerce, manufacture, profession, vocation or any other similar activity, whether or not it is for a pecuniary benefit; (b) any transaction in connection with or incidental or ancillary to (a) above; (c) any transaction in the nature of (a) above, whether or not there is volume, frequency, continuity or regularity of such transaction; (d) supply or acquisition of goods including capital assets and services in connection with commencement or closure of business; (e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members, as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case may be; (f) admission, for a consideration, of persons to any premises; and (g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation; A very wide and inclusive definition. Covers Profession and Vocation or any other similar activity. Te term similar activity may give scope for interpretation and disputes 2(21) (21) casual taxable person means a person who occasionally undertakes transactions involving supply of goods and/or services in the course or furtherance of business whether as principal, agent or in any other capacity, in a taxable territory where he has no fixed place of business; IF done in individual capacity not in the course or furtherance of business is not covered 2(27) (27) composite supply means a supply consisting of - (a) two or more goods; (b) two or more services; or (c) a combination of goods and services provided in the course or furtherance of business, whether or not the same can be segregated; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The definition is not clear. Borrowed from the concept of bundled services There can be a composite contract of supply of goods and services. How supply of two separate services and two separate goods can be tretaed as composite supply is not clear. 2(28) (28) consideration in relation to the supply of goods and/or services to any person, includes (a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods and/or services, whether by the said person or by any other person; (b) the monetary value of any act or forbearance, whether or not voluntary, in respect of, in response to, or for the inducement of, the supply of goods and/or services, whether by the said person or by any other person: Provided that a deposit, whether refundable or not, given in respect of the supply of goods and/or services shall not be considered as payment made for the supply unless the supplier applies the deposit as consideration for the supply Payment for inducement of supply of goods or services is also a consideration. Any Deposit which is not applied as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration by the supplier for supply will not be treated as consideration It covers even advance payments made for supply of goods 2(30) (30) continuous supply of goods means a supply of goods which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, whether not by means of a wire, cable, pipeline or other conduit, and for which the supplier invoices the recipient on a regular or periodic basis; The periodicity of such supplies and the period of contract is not specified 2(31) (31) continuous supply of services means a supply of services which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, for a period exceeding three months with periodic payment obligations and includes supply of such service as the Central or a State Government may, whether or not subject to any condition, by notification, specify A better definition which specifies a period. 2(37) (37) deemed exports , as notified by the Central Government/State Government o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the recommendation of the Council, refer to those transactions in which the goods supplied do not leave India, and payment for such supplies is received either in Indian Rupees or in convertible foreign exchange; Why the condition of receipt of payment .How about free supply in such cases 2(42) (42) exempt supply means supply of any goods and/or services which are not taxable under this Act and includes such supply of goods and/or services which are specified in Schedule . . . of the Act or which may be exempt from tax under section 10; 2(43 ) (43) export of goods with its grammatical variations and cognate expressions, means taking out of India to a place outside India; Why taking out and not supply from India to a place outside India 2(44) (44) the supply of any service shall be treated as export of service when (a) the supplier of service is located in India, (b) the recipient of service is located outside India, (c) the place of supply of service is outside India, (d) the payment for such service has been rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived by the supplier of service in convertible foreign exchange, and (e) the supplier of service and recipient of service are not merely establishments of a distinct person; Explanation.- For the purposes of clause (e), an establishment of a person in India and any of his other establishment outside India shall be treated as establishments of distinct persons. 2(46) (46) fixed establishment means a place (other than the place of business) which is characterised by a sufficient degree of permanence and suitable structure in terms of human and technical resources to supply services, or to receive and use services for its own needs Confusing definition. What is meant by Own Needs 2(48) (48) goods means every kind of movable property other than actionable claim and money but includes securities, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under the contract of supply; Explanation. For the purpose of this clause, the term moveable property shall not include any intangible property Exclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des Intangible Property 2(51) (51) import of goods with its grammatical variations and cognate expressions, means bringing into India from a place outside India; 2(52) (52) the supply of any service shall be treated as an import of service if, (a) the supplier of service is located outside India, (b) the recipient of service is located in India, (c) the place of supply of service is in India, and (d) the supplier of service and the recipient of service are not merely establishments of a distinct person; Explanation 1.- An establishment of a person in India and any of his other establishment outside India shall be treated as establishments of distinct persons. Explanation 2.- A person carrying on a business through a branch or agency or representational office in any territory shall be treated as having an establishment in that territory 2(54) (54) input means any goods other than capital goods, subject to exceptions as may be provided under this Act or the rules made thereund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, used or intended to be used by a supplier for making an outward supply in the course or furtherance of business; Used or Intended to be used Other than capital goods For making Outward Supply In the Course of Business or For furtherance of Business 2(55) (55) input service means any service, subject to exceptions as may be provided under this Act or the rules made thereunder, used or intended to be used by a supplier for making an outward supply in the course or furtherance of business; The word intended to be used-means no one to one correlation is required 2(61) (61) inward supply in relation to a person, shall mean receipt of goods and/or services whether by purchase, acquisition or any other means and whether or not for any consideration; Receipt of goods/ Services by any means even without consideration is covered 2(62) (62) job work means undertaking any treatment or process by a person on goods belonging to another registered ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xable person and the expression job worker shall be construed accordingly Any treatment on goods belonging to another person is job work. It means it covers even repair, testing or any other process or treatment carried out. Expands the scope compared to present definition 2(64) (64) location of recipient of service means: (i) where a supply is received at a place of business for which registration has been obtained, the location of such place of business; (ii) where a supply is received at a place other than the place of business for which registration has been obtained, that is to say, a fixed establishment elsewhere, the location of such fixed establishment; (iii) where a supply is received at more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the receipt of the supply; and (iv) in absence of such places, the location of the usual place of residence of the recipient; 2(65) (65) location of supplier of service means: (i) where a supply is made from a place of business for w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich registration has been obtained, the location of such place of business ; (ii) where a supply is made from a place other than the place of business for which registration has been obtained, that is to say, a fixed establishment elsewhere, the location of such fixed establishment; (iii) where a supply is made from more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the provision of the supply; and (iv) in absence of such places, the location of the usual place of residence of the supplier; 2(67) (67) market value shall mean the full amount which a recipient of a supply is required to pay in order to obtain the goods and/or services of like kind and quality at or about the same time and at the same commercial level where the recipient and the supplier are not related; May give rise to dispute as it is subjective and relative 2(73) (73) outward supply in relation to a person, shall mean supply of goods and/or services, whether by sale, transfer, barter, exchange, licence, rental, lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se or disposal made or agreed to be made by such person in the course or furtherance of business except in case of such supplies where the tax is payable on reverse charge basis; Very wide to include barter also. Excludes RC. Difference between barter and Exchange is to be noted 2(75) (75) place of business includes (a) a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, provides or receives goods and/or services; or (b) a place where a taxable person maintains his books of account; or (c) a place where a taxable person is engaged in business through an agent, by whatever name called; Why the word taxable person is used here 2(80) (80) recipient of supply of goods and/or services means- (a) where a consideration is payable for the supply of goods and/or services, the person who is liable to pay that consideration, (b) where no consideration is payable for the supply of goods, the person to whom the goods are delivered or made available, or to whom possession or use of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods is given or made available, and (c) where no consideration is payable for the supply of a service, the person to whom the service is rendered, and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply; Explanation.- The expression recipient shall also include an agent acting as such on behalf of the recipient in relation to the goods and/or services supplied In case of supply for a consideration, it appears that receipt of goods/services is not important. It is the person who pays is treated as Recipient 2(83) (83) removal , in relation to goods, means - (a) dispatch of the goods for delivery by the supplier thereof or by any other person acting on behalf of such supplier, or (b) collection of the goods by the recipient thereof or by any other person acting on behalf of such recipient; 2(85) (85) reverse charge , means the liability to pay tax by the person receiving goods and / or services instead of the person supplying the goods and / or services in respect of such categories of supplies as the Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l or a State Government may, on the recommendation of the Council, by notification, specify; 2(93) (93) tangible property means any property that can be touched or felt; Property has not been defined Definition of property There are different definitions are given in different act as per there uses and needs. But in the most important act which exclusively talks about the property and rights related to property transfer of property act 1882 has no definite definition of the term property. But it is defined in some other act as per their use and need. Those definitions are as follows: Section 2(c) of the Benami Transactions (Prohibition) Act, 1988 defines property as: Property means property of any kind, whether movable or immovable, tangible or intangible, and includes any right or interest in such property. Section 2 (11) of the Sale of Good Act, 1930 defines property as: Property means the general property in goods, and not merely a special property. 2(104) (104) turnover in a State means the aggregate value of all t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axable and non-taxable supplies, including exempt supplies and exports of goods and / or services made within a State by a taxable person and inter-state supplies of goods and / or services made from the State by the said taxable person excluding taxes, if any charged under the CGST Act, SGST Act and the IGST Act, as the case may be; 2(107) (107) works contract means an agreement for carrying out for cash, deferred payment or other valuable consideration, building, construction, fabrication, erection, installation, fitting out, improvement, modification, repair, renovation or commissioning of any moveable or immovable property; 2(109) (109) zero-rated supply means a supply of any goods and/or services on which no tax is payable but credit of the input tax related to that supply is admissible; Explanation.- Exports shall be treated as zero-rated supply. 3 3. Meaning and scope of supply (1) Supply includes (a) all forms of supply of goods and/or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r agreed to be made for a consideration by a person in the course or furtherance of business, (b) importation of service, whether or not for a consideration and whether or not in the course or furtherance of business, and (c) a supply specified in Schedule I, made or agreed to be made without a consideration. (2) Schedule II, in respect of matters mentioned therein, shall apply for determining what is, or is to be treated as a supply of goods or a supply of services. (2A) Where a person acting as an agent who, for an agreed commission or brokerage, either supplies or receives any goods and/or services on behalf of any principal, the transaction between such principal and agent shall be deemed to be a supply. (3) Subject to sub-section (2), the Central or a State Government may, upon recommendation of the Council, specify, by notification, the transactions that are to be treated as- (i) a supply of goods and not as a supply of services; or (ii) a supply of services and not as a supply of goods; or (iii) neither a supply of goods nor a supply of services. (4) Notwithstanding anything contained in sub-section (1), the supply of any branded service by an aggregator, as define ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in section 43B, under a brand name or trade name owned by him shall be deemed to be a supply of the said service by the said aggregator. Includes all supplie,.even without considerations as spelt out in Schedule 1. In case of importation covers even without consideration whether or not in the course of business Supply of goods or services as per Schedule II - Reply By Parth Bhatt as = Sir does agreegatre turnover include supply of capital goods also ? i.e capital goods purchase to be also included while calculatin it or not? Parth,Ahmedabad Dated: 14-8-2016 Reply By Balasubramanian Natarajan as = yes.Aggregate Turnover includes all goods and services supplied Dated: 14-8-2016 Reply By Parth Bhatt as = Thank you for the answer. Dated: 14-8-2016 - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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