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Transactions Treated as Supply under GST

February 26, 2021

Transactions Treated As Supply Under GST

Transactions Treated as Supply under GST

The concept of supply is the willingness of the person to create goods and services to the market. The definition of supply under GST schedule 7 is that the expression supply includes all forms of supply of goods or services such as rental, sale, transfer, bartar etc. which is made for the purpose of business. On the basis of definition of supply under GST schedule 7  a taxable supply under GST can be defined as supply of goods and services which are eligible to pay tax.

Section 2 (108) defines the expression taxable supply under GST as supply of goods or services or both which is leviable to tax under this act. What is Taxable service has been defined under Section 66B,(51) as any service on which service tax is leviable under Section 66B.

Under consideration most transactions of supply are done. In such cases, the supply under GST is calculated on the basis of consideration. Transactions Treated as Supply under GST are mostly between parties which are related or between an agent and a principal. In some cases, supply of goods is made without consideration.

Supply without Consideration under GST

The below described type of supply without consideration under GST is taxable. The person who is doing any business transactions in any of these types should be aware about the tax and satisfy it accordingly.

  • Transfer or disposal of business assets:

A firm can transfer their assets without consideration by gifting, impairment, write-off etc. If the person is using input tax credit, then it becomes supply without consideration under GST. If the person maintained goods and gives for a private purpose, it can be applied as supply, whether considered or not GST shall apply.

  • Supply of goods and services between related persons

GST is applicable to below listed people who can be termed as related persons in supply under GST:      

  1. Legally approved business partners
  2. Same family members
  3. An employer and employee
  4. People related through businesses
  5. Person who shares 25% in each others business
  6. When two people controlled by a third person, or vice versa
  7. Person who is superior to one another’s business
  • Agent

An agent must be registered under GST. He or she can be considered as supply without consideration if he or she meets the following criteria:

  1. Supply of goods by a principal to an agent, where the agent agrees to supply such goods on behalf of the principal.
  2. Supply of goods by an agent to a principal, where the agent agrees to receive such goods on behalf of the principal.
  • Import

If a registered person carries out an import from any of his organization from abroad, it will be considered as supply without consideration and he will be charged on a reverse charge basis.

Types of Supply in GST

Following are the different types of supply in GST

  • Inward Supply
  • Outward Supply
  • One time Supply
  • Continuous Supply
  • Continuous Supply for Goods
  • Continuous Supply for Services
  • Taxable Supply
  • Non-Taxable Supply
  • Exempt Supply 
  • Zero Rated Supplies 
  • Inter-State Supply
  • Intra- State Supply
  • Supplies in the Territorial Waters

This categorization of supply under GST is based on certain factors. On the basis of place of supply under GST it is divided into Inter-state supply and Intra-state supply. According to the place of supply under GST the levy is determined.


Read in Detail:

What is Supply under GST?

Classification of Supply under GST



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