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TMI BlogThe Meaning and Scope of Supply - Section 7X X X X Extracts X X X X X X X X Extracts X X X X ..... of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another; Example A: There are 4 members in the JV including the operating member and each one contributes Rs 100 as part of their share. A total amount of Rs 400 is collected. The operating member purchases machinery for Rs 400 for the JV to be used in oil production. Example A will not be the subject matter of GST for the reason that the operating m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransaction falls under scope of supply is most important to decide GST applicability of the transaction. The term Supply has been inclusively defined in the Act. The meaning and scope of supply under GST can be understood in terms of following six parameters, which can be adopted to characterize a transaction as supply: 1. Supply of goods or services. Supply of anything other than goods or services does not attract GST 2. Supply should be made for a consideration 3. Supply should be made in the course or furtherance of business 4. Supply should be made by a taxable person 5. Supply should be a taxable supply 6. Supply between the club/ association and its members shall be a taxable supply. The term goods and services hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcular No. 216/10/2024-GST dated 26.06.2024 ] * Clarification as to whether in case of motor vehicle insurance, GST is payable by the insurance company on salvage/ wreckage value earmarked in the claim assessment of the damage caused to the motor vehicle. [ Circular No. 215/9/2024-GST dated 26.06.2024 ] * In case where the insurance contract provides for settlement of claim on full IDV, without deduction of value of salvage/ wreck, the insured will be paid for full claim amount without any deductions on account of salvage value. * In such a situation, the salvage becomes the property of Insurance Company after settling the claim for the full amount and the insurance company is obligated to deal with the same or dispose of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of 'supply' and would be taxable under GST. Section 7(1A) - Deemed supply Inserted by Finance Act, 2018 w.e..f. 1.7.2017 where certain activities or transactions constitute a supply in accordance with the provisions of section 7(1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II. * Following services are treated as deemed supply: * Barter system. * Permanent transfer or disposal of business assets. * Supply of goods/services between related person or distinct person as defined in section 25. * Principal supply of goods to his agents. * Agents supplying goods to his principal. * Import of services either from related person or any establishment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) Fees for bays in bus-stand; (7) Slaughter house fees; (8) Fees on pay & use toilets; (9) - Cycle stand, Scooter, auto stand in the bus-stand are activities etc. in relation to functions entrusted under Article 243G and Article 243W of the Constitution and are treated as neither supply of goods nor services when provided by the applicant as 'Public authority' as per Notification No. 14/2017-C.T.(Rate) dated 28th June 2017 as amended time to time. * Howsoever In respect of activity Locker Rent in the bus-stand, the activity is not in relation to the functions entrusted under Article 243G and 243W of the Constitution and therefore is treated as 'Services' and Locker Rent is liable to GST. Section 7(3) - Classification a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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