Notification Schedule 2 ( Schedule II ) of GST Act i.e It Segregates some activities like which Activities to be treated as Supply of Goods and which activities as Supply of Services

Financial Year: 2017

SCHEDULE II

[See section 7]

ACTIVITIES (OR TRANSACTIONS) TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES

 

 

"OR TRANSACTIONS" has been inserted by GST Amendment Act 2018 wref 01st July 2017

1 Transfer

 

(a)     any transfer of the title in goods

is a supply of goods;   (High Sea Sales)

 

(b)      any transfer of

right in goods

or of undivided share in goods

without the transfer of title thereof,

is a supply of services;  (Covers Renting of Goods, Undivided Portion means exclusive possession is not mandatory i.e. One Locker provided in Bank, Taxi Shared.)

 

(c)        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,

is a supply of goods. (Ex Hire Purchase)

 

2. Land and Building

 

(a)   any lease,

tenancy,

easement,

licence to occupy land

is a supply of services; (Providing Building on Lease, It can be of 99 Years)

 

(b)    any lease or

 letting out of the building

 including a commercial, industrial or residential complex for business or commerce,

         either wholly or partly,

         is a supply of services (Ex Renting of Building)

 

3. Treatment or process

 

Any treatment or process which is applied

to another person's goods

is a supply of services. (Ex Job Work)

 

4. Transfer of business assets

 

(a)    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, (Omitted by Finance Act 2020)

such transfer or disposal is a

supply of goods by the person;

 

(b)    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,(Omitted by Finance Act 2020)

the usage or making available of such goods

is a supply of services;

 

 

(c)    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.

 

 

4   Supply of services

 

The following shall be treated as supply of services, namely:—

 

1. (a)      renting of immovable property; (Residuary Property Leasing, it can be machinery)
2.  
3. (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.  

 

 

Explanation.—For the purposes of this clause—

 

                          (1)   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;

 

(2)                   the expression "

construction" includes additions, alterations, replacements or remodelling of any existing civil structure;

 

 

(c)        temporary transfer or

permitting the use

or enjoyment of any

intellectual property right.  (Ex Allowing use of Trademark, Copyright, Patent)

 

(d)        development, design, programming, customisation, adaptation, upgradation, enhancement, 

            implementation of

information technology software; (Ex Development of 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

 

(e)        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.

(This is renting of goods where posesssion and control of goods is transferred)

 

 

 

6.     Composite supply

 

The following composite supplies shall be treated as a supply of services, namely:—

 

1.  (a) works contract as defined in 2(119) of the act and
2.  
3.  (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.

 

 

7. Supply of Goods

 

The following shall be treated as supply of goods, namely:—

 

Supply of goods by

any unincorporated association or

body of persons

 

to a member thereof for

cash, deferred payment or other valuable consideration

(Omitted by Finance Act 2021 and inserted a clause as Section 7(1)(aa) wref 1st July 2017)

 

Thanks

CA Rahul Gupta