Under the Goods & Services Tax, a taxable event is the supply. A transaction must fall within the four walls of the term ‘supply’ for applying the levy and collection provisions envisaged in the GST laws. Liability to pay tax ensues at the time of supply of goods or services.
The term supply is not defined in the GST Act. But the term taxable supply is defined under section 2 (108) of the CGST Act as supply of goods or services or both which is levy-able to tax under the act. In Section 7 of the CGST Act, a wider, inclusive range of activities are listed out, 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. It is not necessary that a transaction must be a concluded one, an agreement to enter into would also come within the scope of supply. All though, consideration and intent, in the form of ‘in the course or further of business’, are condition precedent for a transaction to qualify as a supply. In the schedule 1 of the CSGST Act 2017, there are a few exemptions that would invalidate the requirement of consideration and intent in the style of ‘in the course of furtherance of business. Therefore section 7 must be read in conjunction with schedule 1.
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