Section Section 7 of CGST Act i.e. Defination of Supply read with circulars and amendments as applicable till date

Financial Year: 2017

 

Section 7 of CGST Act

 

 

Defination of Supply

 

To be read with   (a) CGST Amendment Act 2018 (b) Schedule I (c) Schedule II (d) Schedule III (e) Notification No 14/2017 Central Tax Rate dated 28/06/2017 (f) CGST Amendment Act 2021

 

 

Section 7(1)   “Supply” includes:-

 

(a)   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;

 

 

(aa) the activities or transactions

        By a person, other than an individual

        to its members or constituents or vice versa

        for cash, deferred payment or other valuable consideration

 

Explanation:-

For the purpose of this clause it is hereby clarified that

Notwithstanding anything contained in any other law for the time being in force

Or any judgment, decree or order of any court, tribunal or authority

The person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another.

(INSERTED BY FINANCE ACT 2021 WITH RETROSPECTIVE EFFECT FROM 1^ST JULY 2017)

 

Article on Section 7(1)(aa) i.e,. Why this amendment is required

 

(b)   import of services

for a consideration

whether or not in the course or furtherance of business and 

(And has been Inserted by CGST Amendment Act 2018)

 

 (c) the activities Specified in Schedule I,

made or agreed to be made

without a consideration; and

(And has been Omitted by CGST Amendment Act 2018)

 

 (d) the activities to be treated as

supply of goods or supply

of services as referred to in Schedule II.

(Omitted by CGST Amendment Act 2018)

 

(1A)        Where certain activities or transactions

constitute a supply in accordance with the provisions of sub section (1),

              they shall be treated either as

supply of goods or

supply of services as referred to in schedule II

(Inserted by CGST Amendment Act 2018)

 

(2) Notwithstanding anything contained in sub-section (1),

 

(a) activities or transactions specified in Schedule III; or

 

(b) such activities or transactions undertaken by the

Central Government,

 a State Government or

any local authority

in which they are engaged as public authorities,

as may be notified by the Government on the recommendations of the Council,

 

shall be treated

neither as a supply of goods

nor a supply of services.

 

NOTIFICATION NO 14/2017 CENTRAL TAX RATE   Section 7(2)(b) read with Notification No 14/2017 Central Tax Rate Dated 28/06/2017   Services by way of any activity in relation to function entrusted to a panchayat under acticle 243G of the constitution   Provided by Central Govt, State Govt or any local authority In which they are engaged as public authorities Shall Neither be Treated as supply of goods or supply of services   NO GST will be applicable only when CG, SG or local authority provides any supply to Panchayats.   If panchayats receive goods or services from anybody else GST would be applicable.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3) Subject to the provisions of sub-sections (1), (1A), and (2),   

((1A)Added by CGST Amendment Act 2018) 

 

the Government may, on the recommendations of the Council,

 

specify, by notification,

 

the transactions that are to be treated as—

(a) a supply of goods and not as a supply of services; or

 (b) a supply of services and not as a supply of goods

 

Thanks

CA Rahul Gupta