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TMI BlogCertain Activity or Transaction whether it is Supply of Goods or Services- Para 2 Schedule II Read with Section 7(1A)X X X X Extracts X X X X X X X X Extracts X X X X ..... n defined in Schedule II whether it is Supply of Goods or Services - As per para 2 of Schedule II of CGST Act - Transfer of Land Building (a) Transfer of property in goods at a future date - Supply of Goods Here comes the transactions such as Hire Purchase, Operating Lease and Finance Lease where ownership is transferred at a future date upon payment of full consideration. Any transfer of title in goods under an agreement which stipulates that property in goods will pass at a future date upon payment of full consideration, shall be treated as supply of goods. Hire Purchase- In the hire purchase, hirer has an option or an obligation to purchase goods and after the stipulated period, upon payment of all the instalment ownership is transfer to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lease are: The lease transfers ownership of the asset to the lessee by the end of the lease term; The lessee has the option to purchase the asset at a price which is expected to be sufficiently lower than the fair value at the date the option becomes exercisable such that, at the inception of the lease, it is reasonably certain that the option will be exercised; The lease term is for the major part of the economic life of the asset even if title is not transferred; At the inception of the lease the present value of the minimum lease payments amounts to at least substantially all of the fair value of the leased asset; and The leased asset is of a specialised nature such that only the lessee can use it without major modifications being made. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ership and title is transferred to Mr. A after full payment. (b) Any Lease, tenancy, easement, license to occupy Land - Supply of service The scope is confined to Land Only. It would cover the leasing of Land to a car showroom for the purpose of parking of car or for dumping of scrap or waste etc. Important Clarification Issue related to taxability of tenancy rights under GST [ Circular No. 44/18/2018-CGST Dated 2nd May, 2018 ] 1. The activity of transfer of tenancy right against consideration in the form of tenancy premium is a supply of service liable to GST . It is a form of lease or renting of property and such activity is specifically declared to be a service in para 2 of Schedule II i.e. any lease, tenancy, easement, licence to occupy ..... X X X X Extracts X X X X X X X X Extracts X X X X
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