Synopsis for Concept of Supply
Supply of a good or service, made or agreed to be made for a consideration by a person in the course or furtherance of business such as
• Sale, transfer ,barter, exchange
• License, rental, lease
• Importation of services for consideration (whether or not in course of furtherance or business.),here
BARTER – includes only an exchange of goods/services. (GST charged on good of higher value)
EXCHANGE-includes partly payment in cash and partly for in goods. (GST charged on open market value/ sum of cash and monetary value of partial consideration.
Exceptions as to above clause
Activities to be treated as supply even if made without consideration
1. Permanent transfer or disposal of business assets where Input Tax Credit availed.
2. Supply between related person and distinct person, made in the course or furtherance of business.
Related person: persons who are partners, employer/employee, superior-subordinate, associated in the business of one another, either controlled by or control a third person.
Distinct person: a person or an establishment who has obtained or required to obtain more than one registration in one or more state/UT, in respect of each such registration be treated as distinct person.
3. Gift given by employer to employees exceeding Rs.50,000.
4. Supply of only goods between principal-agent without consideration is also a supply.
Activities or transactions which shall be treated neither as a supply of goods or service
1. Sale of land and sale of building
2. Services of funeral, burial etc including the transportation of deceased
3. Services by any court or tribunal
4. Actionable claims, other than lottery, betting and gambling.
TREATMENT OF COMPOSITE SUPPLY AND MIXED SUPPLY
COMPOSITE SUPPLY: where goods and services both are bundled owing to natural necessities. (Tax liability will occur on the principal supply)
MIXED SUPPLY: where two or more individual supplies of goods or services, made in conjunction with each other for a single price and such individual supplies are independent of each other and not naturally bundled. (Tax liability will occur on that particular supply that attracts higher rate of tax.
Synopsis for Determination Of Place Of Supply
DETERMINATION OF LOCATION OF GOODS
Is determined by the physical point where the goods are situated.
DETERMINATION OF PLACE OF SUPPLY OF GOODS
CASES PLACE OF SUPPLY
Where supply involves movement – place where movement terminates for delivery to the recipient
Where goods are delivered by the supplier to recipient but at the instruction of third party – Principal place of business of such third party
E-Commerce sale – Location of the registered buyer to which bill is sent.
Where supply does not involve movement of goods – Location of goods at the time of delivery to the recipient.
Where goods are assembled or installed at a site -Location of such installation or assembly
Where goods are supplied on board a conveyance – Location at which the goods are taken on-board
Where goods are imported – Location of importer
Where goods are exported – Location where goods are exported
DETERMINATION OF LOCATION OF SUPPLIER OF SERVICES
CASE LOCATION OF SUPPLIER/SERVICES
Where supply is made from a place of business for which registration has been obtained the – location of such place
Where supply is made from a place other than place of registration (a fixed establishment Elsewhere) – The location of such fixed establishment
Supply made from more than one establishment – Location of the establishment most directly concerned with provision of supply.
In absence of any of the above – Location of the usual place of residence of supplier.
DETERMINATION OF PLACE OF SUPPLY OF SERVICES
CASES PLACE OF SUPPLY
Service to a registered recipient – Location of such person
Service to an unregistered person – on record address of such person, if not available, then location of supplier.
Services in relation to immovable property e.g. architects, interior decorators. – Location of such property
Services of restaurant, catering, beauty treatment – Where these services are actually performed.
Services of training and performance appraisal – Location of the recipient( recipient being the payer of consideration)
Services of admission to a venue such as amusement park – Location of venue
Service of organizing an event – Location of recipient
If recipient not registered, then – location of venue.
Service of transportation of goods – Location of recipient.(when registered) If not registered, then place where goods are handed over for such transportation.
Service of transportation of passenger – Location of recipient (registered)
If not registered, – location of embarkation(where passengers board)
Services supplied on board a conveyance – First schedule of departure
Banking and financial services – Address on record of the recipient If address not available, location of supplier.
Insurance services – Location of recipient (if registered) If not registered, address on record of recipient.
IF SUPPLIED TO GOVERNMENT- location of such dissemination
IF IDENTIFIABLE TO A SPECIFIC STATE – such state.
IF NUMBER OF STATES-rule of proportion or any other reasonable basis.
Export of services Location of recipient of such service If location not know, then location of supplier.
• Services in respect of goods made available to person – Location where services are actually performed.
• Services directly in relation to immovable property – Location of such property
• Service of online information and database access – Location of recipient