In GST law, supply is the taxable event. Supply is broadly defined in section 7 of the CGST Act, 2017. As per section 7(1A) of CGST Act, 2017, supply includes activities referred to in schedule II. This schedule of CGST Act contains the list of activities which have been classified either as supply of goods or supply of services. In this post, we have listed all those activities which will be treated as supply in addition to activities that satisfy criteria of section 7 and mentioned in GST schedule I.
List of activities treated as supply of goods
- any transfer of the title in goods;
- any transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payment of full consideration as agreed. Examples are hire purchase, lease etc.;
- where goods forming part of the assets of a business are transferred or disposed of by or under the directions of the person carrying on the business so as no longer to form part of those assets, whether or not for a consideration, such transfer or disposal is a supply of goods by the person;
- where any person ceases to be a taxable person, any goods forming part of the assets of any business carried on by him shall be deemed to be supplied by him in the course or furtherance of his business immediately before he ceases to be a taxable person, unless—
(i) the business is transferred as a going concern to another person; or
(ii) the business is carried on by a personal representative who is deemed to be a taxable person.
- Supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration.
List of activities treated as supply of services
- any transfer of right in goods or of undivided share in goods without the transfer of title thereof;
- any lease, tenancy, easement, licence to occupy land;
- any lease or letting out of the building including a commercial, industrial or residential complex for business or commerce, either wholly or partly.
- Any treatment or process which is applied to another person’s goods.
- where, by or under the direction of a person carrying on a business, goods held or used for the purposes of the business are put to any private use or are used, or made available to any person for use, for any purpose other than a purpose of the business, whether or not for a consideration, the usage or making available of such goods is a supply of services;
- The following shall be treated as supply of services, namely:—
(a) renting of immovable property;
- Renting of a commercial complex.
- Renting of precincts of a religious place.
- Renting of property to an educational institution
- Permitting use of immovable property for placing vending or dispensing machines.
(b) 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 the competent authority or after its first occupation, whichever is earlier. The term construction includes additions, alterations, replacements, or remodeling of any existing civil structure.
For the purposes of this clause, the expression “competent authority” means the Government or any authority authorised to issue completion certificate under any law for the time being in force and in case of non-requirement of such certificate from such authority, from any of the following, namely:—
(i) an architect registered with the Council of Architecture constituted under the Architects Act, 1972; or
(ii) a chartered engineer registered with the Institution of Engineers (India); or
(iii) a licensed surveyor of the respective local body of the city or town or village or development or planning authority;
(c) temporary transfer or permitting the use or enjoyment of any intellectual property right;
(d) development, design, programming, customisation, adaptation, upgradation, enhancement, implementation of information technology software;
(e) agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; and
(f) transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration.
GST on composite supply
The following composite supplies shall be treated as a supply of services, namely:—
(a) works contract as defined in clause (119) of section 2; and
(b) supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration.
Transfer of tenancy rights
Transfer of tenancy rights to a new tenant against consideration in the form of tenancy premium is treated as supply of services liable to GST.
Further, services provided by outgoing tenants by way of surrendering the tenancy rights against consideration in the form of a portion of tenancy premium is liable to GST (circular number 44/18/2018 CGST darted 02.05.2018).
However, as per entry 12 notification number 12/2017 CT (R) dated 28.06.2017, grant of tenancy rights in a residential dwelling for use as residence dwelling against tenancy premium or periodic rent or both is exempt from tax.
Cash calls raised by an operating member of the joint venture on other members in proportion to their participating interest in the joint venture is not considered as supply. However, if an operating member is providing services to the JV or on behalf of the JV, then it will be treated as supply of services (circular number 35/09/2018 GST dated 05.03.2018).