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Supply and
its Types
1
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 BBA 309

Learning
Outcome Able to understand the concept of indirect taxes
along with basic of GST and the procedure for
registration. K2 , PO4
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 Taxable Event
Meaning of Supply
Conditions for Supply
Section 7 , CGST Act
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Course 3
Section 8 , CGST Act

Outline
BBA 309
 Taxable Taxable event under GST is the Supply of goods &
services or both made for consideration in the
event under course or furtherance of business.

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GST BBA 309
Supply is defined under CGST Act 2017 and the
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same meaning is applied under IGST Act and

UTGST Act/ SGST Act.
 Conditions Supply of Goods and services

for supply For Consideration

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Course or furtherance of business

CGST Act
Taxable territory and taxable person
2017
Meaning of Goods and Goods means every kind of movable property
other than money & securities but includes;
services taxable event Actionable claims
Growing crops

under GST
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Services means anything other than goods and

money & securities
 Taxable Territory means place where provisions of
Act is applicable.
Taxable Person means who is registered or liable
Meaning of Taxable to be registered under section 22 or 24 of CGST
Act 2017.
Example may includes any person , HUF ,
Territory & Taxable company , LLP ,etc.
Individual
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Person BBA 309
HUF7

Company
Firm
AOP / BOI
Local Authority
Artificial Person
 Consideration includes;
1. Any payment or
2. The monetary value of ;
-Any act or so Meaning of Consideration
-Whether by the recipient or any other person
-In response to , or , inducement of , supply
3. May be present or past or future.
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4. Monetary or NonBBAMonetary
309 8

Basically it is “ Quid pro quo ” i.e Something in Return

Not includes : Subsidy given by either Central or State
Government
 Monetary Consideration

• Cash
• Cheque
• Promissory Note
• Draft
• Pay order
Non Monetary • Electronic Transfers
Monetary Consideration
Consideration
Non Monetary Consideration

• Supply of goods or services

• Doing or agreeing to do an act
• Refraining or forbearing to do an act
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 Any activity carried out by the entity in the course or furtherance of business is
included in the ambit of business definition and hence will be considered as
‘supply’ under GST.
As per Section 2(17) of CGST act , business includes;
any trade, commerce, manufacture, profession, vocation, adventure, wager or any
other similar activity, whether or not it is for a pecuniary benefit
any activity or transaction in connection with or incidental or ancillary to (a)
above;
any activity or transaction in the nature of(a) above, whether or not there is
volume, frequency, continuity or regularity of such transaction;
• supply or acquisition of goods including capital assets and services in
connection with commencement or closure of business;
• provision by a club, association, society, or any such body (for a subscription Meaning of “ to
or any other consideration) of the facilities or benefits to its members, as the
case may be; be made in
• admission, for a consideration, of persons to any premises; and
• services supplied by a person as the holder of an office which has been course or
accepted by him in the course or furtherance of his trade, profession or
vocation; furtherance of
• any activity or transaction undertaken by the Central Government, a State
Government or any local authority in which they are engaged as public Business”.
authorities
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BBA 309
 (Sec.7) Supply
Meaning &
(Sec.7 &
Scope of GST 8, CGST
Act, 2017)
11
Sec 8
• Composite
supply
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• Mixed
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supply
 Supply under GST (Section 7 of CGST ACT, 2017)

Sec 7 1(a) Sec 7 (1)(b) (1)(c ) (1) (d)

Supply means, all forms of Import of services, Supply includes all the Activities which
supply of goods or services or if such import is activities specified in constitute a supply
both like sale, transfer, barter,
•for consideration schedule I of CGST Act. to be treated either
exchange, license, lease or Activities, made or agreed
disposal made or agreed to • may or may not to be made without a
supply of goods or
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made. Supply should be made be in course or consideration to be supply of services.
or agreed to be made for a
consideration by a person in
furtherance of treated as supply It is to be referred in
course or furtherance of business scheduled II of
business CGST Act
 Section 7(1)(a)

Rental Sale Transfer

Barter
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License Exchange
 Sec 7 (1) (b)

Import of services, shall be treated as supply , if such import meets both the listed conditions.
•for consideration
• may or may not be in course or furtherance of business
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Example : Aamir is a supplier based in UP. On June 19 ,2020 , he has imported “ Consultancy
Services” from USA for a stipulated amount of 25,000.

Here , both conditions are met , hence it is treated as Supply.

 The following activities are treated to be supply
even if made without consideration provided they
must be in course or furtherance of business
1. Permanent transfer or disposal of business
assets, where input tax credit has been availed on
Sec 7 (1 ) (c)Activities such assets (ITC availed)
2. Supply between related or distinct person(
Specified in Schedule I Explanation in next slides)
3. Supply of goods
of CGST Act
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• by a principle to his agent where the agent undertakes to
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supply such goods on behalf of the principle ;or

• by an agent to his principle where the agent undertakes to
receive such goods on behalf of the principle
 Import of services by a taxable person from a related person
or from any of his other establishments outside India, in
course or furtherance of business

Import of services

With consideration Without consideration

Only taxable in case of

Whether related to related person/ distinct
business or not will person and in course or
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be taxable furtherance of business
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 Related or Distinct Person

Director / Officers of more than one Legal Partners .

organization. If Pooja and Ridhi are partners
in PLC Ltd , then Pooja nd
Example : A is director in ABX Ltd and also
holds position at XYZ Ltd.
Ridhi are related persons.

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Employer & Employee Either two persons are controlled

by a third person or they together
relationship control the third person

One person holds directly or indirectly > 25 % of voting stock of two or

Member of the same family more than two companies
 A person who has obtained or is required to obtain
Distinct Person more than one registration, whether in one state or
more than one state, shall be treated as distinct
person, in respect of each such registration.
Conditions :
1. GST registration is done state wise
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2.Each registration should have separate GSTIN
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Mr. A has one business in UP Mr. A

has other business in Delhi

Inter-state self supplies are also taxable under GST

 Continued ; Example
• R ltd is in a business of automobiles parts. He has its registered office in the Tamil Nadu while has many
regional offices in different states having registration in each state.
– In this case , if R ltd transfers certain goods to any of his regional office , then the same will be considered
as supply even in case of no consideration.

– Stock in trade of R ltd has been set on to its holding company namely G Ltd without consideration to be
used in business. Will it be supply ?

• R works as employee in ABC Ltd. The owner has transferred some goods to R without consideration for
business use. Will it be supply ? If R is not an employee of ABC Ltd , will there is any change in the answer
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?
• R is carrying on business of consumer durable products. R paid relevant Gst on the products purchased by
him. He disposed off a defective TV to G for use in business. Will it be supply ? If G uses it for personal use
, will it make any difference ?
 •by a principle to his by an agent to his principle where
agent where the agent the agent undertakes to receive
undertakes to supply
such goods on behalf of the
such goods on behalf of
the principle principle
Supply of goods

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Principle / Agent
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Principle means “ a person on whose behalf an Agent means “ a person who carries on
agent carries on the business of supply or receipt the business of supply or receipt of goods
of goods and services and services or both on behalf of another
 Example

Goods supply Goods supply

Nakul
Supplies goods by Anuj to by Nakul to
undertakes to
to his agent Nakul will be Ram will be
Anuj supply goods on
Nakul in treated as treated as
behalf of Anuj
Jammu supply and supply and
to Ram
21 liable for IGST liable for SGST

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 Example

Himanshu agrees
Transfer of goods
Himanshu works Deepanshu is a to purchase
from Himanshu
as agent and is manufacturer goods from west
to Deepanshu is
located at West located in Bengal and
supply under
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section 7(1)(c)
to Deepanshu
 Quiz

• Import of services from unrelated person for personal consumption without consideration ?
– Import of services from unrelated person for business use with consideration ?
• Import of services from unrelated person for business use without consideration ?
• Import of services from unrelated person for personal consumption with consideration ?

• Import of services from related person for personal consumption with consideration ?
• Import of services from related person for business use with consideration ?

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 Key Learning

Concept of Taxable Event Concept of Supply Consideration

24
Related Persons Distinct Persons

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 End

References :
Textbook : GST Goods & Services Tax , Maximax
Publications , Dr. Girish Ahuja and Dr. Ravi

Thank you Gupta

E Content : Issued by Indirect Taxes Committee ,
June 2017
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Website used :www.icai.org; www.idtc.icai.org