1. What is a taxable event under the Goods and Services Tax (GST)?
The taxable event under GST shall be the supply of goods, services, or both made for consideration in the course of business. The taxable events under the existing indirect tax laws, such as for manufacturing, sales, and services, shall be subsumed in the taxable event known as ‘supply’.
2. What is the scope of supply under the GST law?
The term ‘supply’ covers all forms of supply of goods, services, or both that include sale, transfer, barter, exchange, license, rental, lease, or disposal made or agreed to be made for consideration by a person in the course of business — including imports. Likewise, the model GST law supports certain transactions carried out without consideration within the scope of supply.
3. What is a taxable supply?
A taxable supply is a supply of goods, services, or both that is chargeable to goods and services tax under the GST Act.
4. What are interstate supplies and intrastate supplies?
Interstate and intrastate supplies have specifically been defined in Section 7 (1), 7 (2) and 8 (1), 8 (2), respectively, of the Integrated GST (IGST) Act. When the location of the supplier and the place of supply are in the same state, it will be intrastate. When they are in different states, it will be interstate supply.
5. What are the necessary components that constitute supply under the Central GST (CGST)/State GST (SGST) Act?
To constitute a supply, the following elements must be satisfied:
- The activity involves the supply of goods, services, or both
- Supply is for consideration unless otherwise expressly provided for
- Supply is made in the course of business
- Supply is made in a taxable territory
- Supply is a taxable supply
- A taxable person makes the supply
6. Are self-supplies taxable under GST?
Interstate self-supplies such as stock transfers, branch transfers, or consignment sales shall be taxable under IGST even though such transactions may not involve the payment of consideration. However, intrastate self-supplies are not taxable subject to not opting for registration as a business vertical.
7. Is the transfer of title and/or possession necessary for a transaction to constitute supply?
Title as well as possession both must be transferred in a transaction to be considered a supply of goods. If the title is not transferred, the transaction will be treated as a supply of services, per Schedule II (1) (b). If possession is transferred immediately but the title is to be transferred at a future date, as in the case of a hire-purchase arrangement, it would be a supply of goods.
8. Will works contracts and catering services be treated as a supply of goods or services?
Works contracts and catering services shall be treated as a supply of services, as specified under Sl. No. 6 (a) and (b) in Schedule II of the model GST law.
9. Will supply of software be treated as a supply of goods or services?
Development, design, programming, customization, adaptation, upgrades, enhancement, and implementation of information technology software shall be treated as a supply of services as listed in SR. No. 5 (2) (d) of Schedule II of the model GST law.
10. Are any activities treated as neither a supply of goods nor a supply of services?
Yes, Schedule III of the model GST law lists certain activities, such as:
- Services by an employee to the employer in the course of or in relation to his employment
- Services by any court or tribunal established under any law
- Functions performed by members of parliament, state legislatures, local authorities, and constitutional functionaries
- Funeral, burial, crematorium, or mortuary services
- Sale of land
- Actionable claims other than a lottery, betting, and gambling
11. What is a composite supply under the CGST/SGST/Union Territory (UTGST) Act?
Composite supply means a supply, made by a taxable person to a recipient, comprising two or more supplies of commodities or services, or any combination thereof, that are naturally bundled together and provided in conjunction with each other in the ordinary course of business, one of which is a principal supply. For instance, when goods are bundled and transported with insurance, the provision of goods, carrying materials, transport, and insurance is a composite supply, and the supply of commodities is the primary supply.
12. What is a mixed supply?
Mixed supply means two or more individual supplies of goods or services, or any combination thereof, produced in conjunction with each other by a taxable person for a single price where such provision does not comprise a composite supply. For example, a supply consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drink, and fruit juice at a single price is a mixed supply, as each of these items can be supplied separately and is not dependent on any other.
13. How will tax liability on a mixed supply be determined under GST?
A mixed supply comprising two or more supplies shall be treated as a supply of that particular supply that attracts the highest rate of taxation.
14. What is implied by zero-rated supply under GST?
Zero-rated supply means the export of goods and/or services or supply of goods and/or services to a Special Economic Zone (SEZ) developer or unit.