1:  What is importance of the word ‘supply’ in GST?

The taxable event in GST Act is supplies of goods or services or both. If any activity covers under the ambit of “supply” such activity shall be chargeable to GST. Therefore, supply plays a pivotal role in GST regime.

2:  What is the scope of ‘supply’ under the GST law?

As per section 7 of CGST Act, 2017 the term ‘supply’ includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. However, there are few activities which despite being made without consideration, are considered as supply under the GST regime. Further, it also includes import of services for a consideration whether or not in the course or furtherance of business.

3:  What is a taxable supply under GST regime?

As per the provisions of section 2 (108) of CGST Act, 2017, A ‘taxable supply’ means a supply of goods or services or both which is leviable to tax under this Act.

4:  What is ‘consideration’ under GST regime?

As per the provisions of section 2 (31) of CGST Act, 2017, “consideration” in relation to the supply of goods or services or both includes:

(a) Any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government;

(b) The monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government.

However, deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply.

5:  Can any activity made without consideration is treated as supply and taxable under GST?

Yes. There are certain activities as specified under section 7 (1) (b) read with Schedule I of CGST Act, 2017 which despite being made without consideration are treated as supply and therefore taxable under the GST regime.

6:  Who can notify a transaction to be supply of goods or services?

The Government may, on the recommendations of the Council, specify, by notification, the transactions to be either the supply of goods and not supply of services or supply of services and not supply of goods or neither a supply of goods nor a supply of services.

7:  What are the different types of supplies under the GST law?

Broadly, supplies can be distinguished in following five categories:

1. Taxable and exempt supplies.
2. Inter-State and Intra-State supplies,
3. Composite and mixed supplies and
4. Zero rated supplies.

8:  What are inter-state supplies and intra-state supplies?

As per the provisions of section 7 of IGST Act, 2017 where the location of the supplier and the place of supply are either in two different States or in two different Union territories or in a State and a Union territory, supply between the two shall be treated as a supply of goods in the course of inter-State trade or commerce. In addition to this, import of goods or services or both and supply by or to Special economic zone shall also be treated as Inter- state supply.

As per the provisions of section 8 of IGST Act, 2017 where the location of the supplier and the place of supply of goods are in the same State or same Union territory, said supply shall be treated as intra-State supply.

9:  How tax liability shall be computed on Inter- state supply of goods or services or both?

As per the provisions of section 5 of IGST Act, 2017, there shall be levied a tax called the integrated goods and services tax on all inter-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption.

10:  What is a Composite Supply?

As per the provisions of section 2 (30) of CGST Act, 2017, Composite supply means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply;

Illustration: Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply.

11:  What is meant by ‘Principal supply’?

As per the provisions of section 2 (90) of CGST Act, 2017, “principal supply” means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary.

12:  How tax liability shall be computed on Intra state supply of goods or services or both?

As per the provisions of section 9 of CGST Act, 2017 there shall be levied a tax called the Central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption.

13:  How tax liability on a composite supply shall be computed under GST?

As per the provisions of section 8 of CGST Act, 2017, composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply.

14:  What is a mixed supply?

As per the provisions of section 2 (74) of CGST Act, 2017, mixed supply means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply.

Illustration: A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied separately.

15:  How tax liability on a mixed supply shall be computed under GST?

As per the provisions of section 8 of CGST Act, 2017, a mixed supply comprising of two or more supplies shall be treated as supply of that particular supply which attracts the highest rate of tax.

16:  What is zero rated supply under GST?

As per the provisions of section 16 (1) of IGST Act, 2017, Zero rated supply means any of the following supplies of goods or services or both, namely:

(a) Export of goods or services or both; or

(b) Supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit.

17:  Whether input tax credit can be availed on zero rated supplies?

As per the provisions of section 16 (2) of IGST Act, 2017, credit of input tax may be availed for making zero-rated supplies.

18:  Whether refund can be claimed by registered person making zero- rated supplies?

As per the provisions of section 16 (3) of IGST Act, 2017, A registered person making zero rated supply shall be eligible to claim refund under either of the following options, subject to such other conditions, namely:

(a) Supply is made under bond or Letter of Undertaking, or

(b) Supply is made on payment of integrated tax.

19:  How Imports of goods shall be treated under GST regime?

As per the provisions of section 7 (2) of IGST Act, 2017, Supply of goods imported into the territory of India, till they cross the customs frontiers of India, shall be treated to be a supply of goods in the course of inter-State trade or commerce.

20:  How Imports of services shall be treated under GST regime?

As per the provisions of section 7 (4) of IGST Act, 2017, Supply of services imported into the territory of India shall be treated to be a supply of services in the course of inter-State trade or commerce.

21:  How supply of goods or services or both to or by Special Economic Zone developer or a Special Economic Zone unit shall be treated?

As per section 7 (5) of IGST Act, 2017, Supply of goods or services or both, to or by a Special Economic Zone developer or a Special Economic Zone unit shall be treated to be a supply of goods or services or both in the course of inter-State trade or commerce.

22:  What is continuous supply of goods?

As per section 2 (32) of CGST Act, 2017, “continuous supply of goods” means a supply of goods which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, whether or not by means of a wire, cable, pipeline or other conduit, and for which the supplier invoices the recipient on a regular or periodic basis and includes supply of such goods as the Government may, subject to such conditions, as it may, by notification, specify.

23:  What is continuous supply of services?

As per section 2 (33) of CGST Act, 2017, “continuous supply of services” means a supply of services which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, for a period exceeding three months with periodic payment obligations and includes supply of such services as the Government may, subject to such conditions, as it may, by notification, specify.

24:  What is “works contract” under GST? Whether it is treated as supply of goods or supply of services?

As per the provisions of section 2 (119) of CGST Act, 2017, “works contract” means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract.

As per clause (a) of paragraph 6 of Schedule II of CGST Act, 2017, Works contracts is composite supply and shall be treated as supply of services.

25:  Whether development, design of software would be treated as supply of goods or supply of services under GST law?

As per sub- clause (d) of clause (2) of paragraph 5 of Schedule II of CGST Act, 2017, Development, design, programming, customization, adaptation, up-gradation, enhancement, Implementation of information technology software shall be treated as supply of services.