What is Supply as per GST?

Introduction

 “Supply” is generally meant as something known in the fundamental economic concept that defines the total amount of a goods or services that are available for human consumption.

As per Concise Oxford Dictionary, Supply provide or furnish (a thing needed) provide, meet or make up for (a deficiency or need etc.)

And from the view point of Law Lexicon- P Ramanatha Aiyar, Supply is that which is or can be supplied, available aggregate of things needed or demanded, an amount sufficient for a given use or purpose.

Thus “Supply” is all in all a broad term which means differently for different people.  Let us know what is the actual definition of Supply under GST.

What is Supply mean under GST?

As per Section 7(1) of CGST Act as amended vide CGST (Amendment) Act 2018 but with retrospective effect from 1-7-2017states that for the purpose of CGST Act, the expression “supply” includes:-

1. all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business
2. importation of services for a consideration whether or not in the course or furtherance of business and
3. the activities specified in Schedule I, made or agreed to be made without consideration

Note:- The definition of “supply” in Section 7(1) of CGST Act is an inclusive definition. Thus, any supply of goods or services would get covered, even if not specified in any of sub-sections of section 7 (1)(b) of CGST Act.

Thus, supply under section 7(1) of CGST Act makes it very clear that supply under GST is made for consideration in course of business.

Also, the import of services shall also be covered and subject to GST even if not made in course of business. So, even the import for charity activities will get covered, even if they are not in course of business.

Activities treated as Supply of goods or services

Some certain activities constitute a supply in accordance with the provision of Section 7 (1) of CGST Act, they must be treated as either supply of services or supply of goods as referred in Schedule II of CGST Act.

Earlier Section 7 (1) – the section 7 (1) was earlier as follows:-

Section 7 (1) of CGST Act, stated that for the purpose of CGST Act, the expression “supply” includes:-

1. all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business
2. importation of services for a consideration whether or not in the course or furtherance of business and
3. the activities specified in Schedule I, made or agreed to be made without consideration

Activities neither Supply of goods nor supply or services

Irrespective of anything contained in section 7(1) of CGST Act, following will neither be treated as supply of goods nor supply of services-

1. activities or transactions specified in Schedule III; or
2. activities or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities as may be notified by Central Government

These were the basic terms under Supply that must be known by everyone under GST. Now let us know some of the additional topics covering the aspect of Supply.

I am very much sure that whosoever has been under the GST must have a doubt as to “From whose point of view, supply shall be considered?”. Well, here you will get to know about it!.

Supply is a term that is from the view point of person supplying and not from the point of view of the person receiving supply. And where the supplier is not in the business of supplying goods or services the he or she shall not be covered the GST as so the GST shall not be applicable.

So, if an Individual is planning to sell his old goods, then as per law it is not possible and that is why GST shall not be applicable. As, GST is applicable on those supply of goods which are sold in the course of business. And for the same PIB press release dated 13-7-2017, it has been clarified that an individual selling old jewellery is not in the business of selling such jewellery. Hence, GST will not be payable by recipient under reverse charge.

Supply of Goods

The following shall be treated as supply of goods, namely –

• supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration

Note:- Supply of goods by club to its members is not covered under supply of services

Supply of Services

The following shall be treated as supply of services, namely-

• renting of immovable property
• construction of a complex, building, civil structure or a part thereof including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required by competent authority or after its first occupation whichever is earlier.
• Temporary transfer or permitting the use or enjoyment of any intellectual property rights
• Development, design, programming, customization, adaptation, upgradation, enhancement, implementation of information technology software
• Agreeing to the obligation to refrain from an act, or to tolerate an act or a situation or to do an act.

Transfer of the right to use any goods for any purpose for cash, deferred payment or other valuable consideration