Section 7 of CGST Act

SCOPE OF SUPPLY

 

Enforced w.e.f. 1-7-2017.

 

Section 7(1)

For the purpose of this Act, the expression “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.

 

Section 7(1)(aa) inserted by finance act 2021 with retrospective effect from 1-07-2017.

However, Notification No. 39/2021- Central Tax, dated 21-12-2021 appoints 1-1-2022 as the date of enforcement.

 

(b)   import of services

for a consideration

whether or not in the course or furtherance of business; and 

(Word “and” has been inserted by CGST (Amendment) Act 2018, w.r.e.f. 1-7-2017)

 

 (c) the activities Specified in Schedule I,

made or agreed to be made

without a consideration; and

(Word “and” has been Omitted by CGST (Amendment) Act 2018, w.r.e.f 1-7-2017)

 

 (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)

 

[For notified supplies which shall be treated neither as a supply of goods nor as supply of services, see Notification Nos. 14/2017-Central Tax (Rate), dated 28-6-2017; 11/2017-Integrated Tax (Rate), dated 28-6-2017 and 14/2017-Union Territory Tax (Rate), dated 28-6-2017].

[For notified supplies which shall be treated neither as a supply of goods nor as a supply of services, see Notification Nos. 25/2019-Central Tax (Rate), dated 30-9-2019; 24/2019-Integrated Tax (Rate), dated 30-9-2019 and 25/2019-Union Territory Tax (Rate), dated 30-9-2019]. 

 

Section 7(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)

 

Section 7(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.

 

Section 7(3)

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

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

 [Words “sub-sections (1) and (2)”, substituted by the CGST (Amendment) Act, 2018].