1. PRACTICAL ASPECTS OF GSTBy
Pradeep K. Mittal
B.Com, LL.B., FCS
Advocate, PKMG Law Chambers
Past Central Council Member,
The Institute of Company Secretaries of India,
New Delhi
id:
Contact Nos

2. “PROVISIONS OF SUPPLY”
PART - A
GOODS AND SERVICE TAX
“PROVISIONS OF SUPPLY”

3. Section 7 Meaning and Scope of Supply
Section 7 of the Central/ State Goods and Service Tax Act, provides for the meaning and scope of the supply which is reproduced as under:
“Supply includes
all forms of supply of goods and/ or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business,

4. (b) importation of service, whether or not for a consideration and whether or not in the course or furtherance of business, and
(c) a supply specified in Schedule I, made or agreed to be made without a consideration.

5. (2) Schedule II, in respect of matters mentioned therein, shall apply for determining what is, or is to be treated as a supply of goods or a supply of services. (2A) Where a person acting as an agent who, for an agreed commission or brokerage, either supplies or receives any goods and/ or services on behalf of any principal, the transaction between such principal and agent shall be deemed to be a supply.

6. (3) Subject to sub-section (2), the Central or State Government may, upon recommendation of the Council, specify, by notification, the transactions that are to be treated as-
a supply of goods and not as supply of services; or
a supply of services and as supply of goods; or
neither a supply of goods nor a supply of services.”

7. (4) Notwithstanding anything contained in sub section (1), the supply of any branded service by an aggregator, as defined in Section 43B, under a brand name or trade name owned by him shall be deemed to be a supply of the said services by the said aggregator.

8. Section 7 of Goods and Service Tax, speaks of “Supply” of both (a) Goods and (b) Services. Section 7(1)(a) “Supply” encompasses all forms of supply such as (i) sale (ii) transfer (iii) barter (iv) exchange (v) license (vi) rental (vii) lease (viii) disposal made for consideration in the course of or in furtherance of business

9. Conditions for charging GST on any transaction:
The break up of Section 7(1) is as under:-
Conditions for charging GST on any transaction: 
Supply of Goods and/or Services;
Supply will include sale, transfer, barter, exchange, license, rental, lease or disposal;
Made or agreed to be made;
For a consideration;
By a person;
In the course or furtherance of business;

10. In the definition of “Supply”, the first two words which emerge is “Sale” and “Transfer” and one needs to understand the meaning of word “Sale” and “Transfer” – Section 54 of Transfer of Property Act, define sale as-
“Sale” is a transfer of ownership in exchange for a price paid or promised or part paid and part promised.”

11. The Supreme Court in the case of K Perusal Mal Vs
The Supreme Court in the case of K Perusal Mal Vs. Rajagopal MANU/SC/0421/2009 has defined the terms “Sale” in the following words:-
“Sale is defined as being a transfer of ownership for a price. In a sale there is an absolute transfer of all rights in the properties sold. No rights are left in the transferor. Price is the essence of a contract of sale.”

12. The word “Transfer” has been defined in Section 63 of Income Tax Act, and is, inter-alia, reads as under:-
63."Transfer" and "revocable transfer" defined". - for the purposes of ss. 60, 61 and 62 and of this section –
(1)…………………...
(i) …………………..
(ii)……………………
(b) "transfer" include any settlement, trust, covenant, agreement or arrangement".

13. Section 7(1)(b): Importation of service, whether or not for a consideration and whether or not in the course or furtherance of business; 
The word supply would include “importation of service whether with or without consideration – whether or not in the course or furtherance of business. The import of service even for personal use shall be subject to tax as long as the “transaction value” is above the threshold limit. The tax would be payable under the “reverse charge mechanism basis”. Though the import of goods and service is subject to payment of Integrated Goods and Service Tax since the importation of service is not intra-state transaction.

14. Section 7(1)(c) : Supply specified in Schedule-I, made or agreed to be made without consideration.
Transactions without consideration: The law provides that in certain cases, even though, there is no consideration, the same would be treated as ‘supply’. Such cases are listed in Schedule I and would be liable to tax in case the value of transaction is above the threshold limits. Such cases are dealt with hereunder:-

15. Clause 1 of Sch.-I: Permanent transfer/disposal of business assets:
The word ‘transfer’ suggests that there should be another person who would receive the business assets at the other end not for temporary period but on permanent basis. The use of the words ‘permanent transfer’ signify that the goods so transferred do not intend to be received back.

16. Where the goods are sent on job work or goods sent for “testing” or goods sent for “certification”, it would not be treated as “supply’ since these goods will come after the “process”, “test” or “certification”. This would cover following transactions-
a) The goods sent on consignment transfers/ for display in showrooms.
b) Donation of X Ray Machine or Sophisticated equipments to a hospital run by a Charitable Trust near the factory for predominant use by employees.
c) Building given by a car manufacturer for use by visitors of ancillary units who have formed association;

17. d) Bus given to employee welfare trust for carriage of employees from township to factory;
e) Building given for use as Employee Welfare Trust for use as a Club or for running any other activities;
f) Cars given to officers/ employees for use by them so long as they are employees of the company for minimum period of ten years.
g) A Ltd is disposing off his Aero-planes for school run by trust.

18. Clause 2- Sch-I: Temporary application of business assets to private use:
Where any business assets (fixed assets, stock in trade, office equipment, motor vehicle etc.) are put to use by the management or the employees for any personal use (non- business use), the same would be ‘supply’ and would, therefore, be liable to tax, though there is no consideration. Few examples would be :-

19. Examples:
The company has given “laptop or car or vehicle” for personal use of employee’s family;
The company own banquet hall which has been let to officer for marriage of his daughter;
The company own helicopter which has been given to senior management for private medical emergency ;

20. d) The company has godown which has been given for storage of goods by Employee Credit & Thrift Society or Welfare Organization.
e) The company engaged in leasing of motor vehicles – and such vehicles are used on the occasion of a marriage in the family - it would be treated as supply and, therefore, taxable.

21. Clause 3 of Sch-I: Services put to a personal or non- business use:
Where any services are provided by the taxable person in the course of his business and if such services are at any time put to use by the management or the employees for any personal use (non-business usage), the same would qualify as ‘supply’ though without consideration.

22. a) An architect who is partner of architect firm designing the house for himself or building complex for his own use would qualify as ‘supply’.
b) A practicing chartered accountant is providing the services to his father in filing his Income Tax Return.
c) A Husband running Gym Service and his wife is also one of the client and availing the services of Gym.

23. d) A person running Motor Garage and his brother in law is availing facilities existing there;
e) A person is running a AC Restaurant in CP and his family has availed the courtesy of Dinner.
f) In a professional and vocation college run by the father, son and daughter getting vocation training;

24. Clause 4 of Sch. I: Assets retained after deregistration:
Where a taxable person deregisters himself under this Act, the assets which are retained by the entity after such deregistration would qualify as supply. Person, at the time of acquiring has availed Input Tax Credit and, therefore, once de- registered, he must pay tax on the value of assets – as he is no longer doing any business – since de-registered.

25. Clause 5 of Sch.- I : Supply of goods and/or services by one taxable person to another taxable person or non-taxable person in the course or furtherance of business:
Any supply of goods and/or services in the course of business or furtherance of business by taxable person to any other person (whether or not a taxable person) even without consideration would qualify as ‘supply’.

26. a) A CA varying out valuation report of assets for another CA for inclusion in the Project Report; b) An Interior Designer is designing the Office of his CA; c) An Architect is preparing a Site Plan of the Residence-cum-Office of his CA. d) CA is carrying out statutory audit of Mandir Trust or Charitable Organization;

27. e) A pharmaceutical manufacturer is clearing the finished goods to Doctors; f) A pharma manufacturers is distributing free torches to the doctors g) M/s Haldiram Ltd is distributing Sweet /Namkin Packets to employee on the eve of Diwali; h) Free medical camp organized by Hospital/Doctor.

28. ANALYSIS OF SCHEDULE-II.
The provisions of this Schedule-II are some-what self explanatory – however, for better understanding and clarity, each and every situation has been explained in greater detail.

29. 1.Transfer 
1(1) Any transfer of the title in goods is a supply of goods
(a): Honda City, a car manufacturer delivered one car to Mr. A and the car was registered in the name of Mr A. This means title of car has been transferred in favour of Mr A. Hence, it will constitute supply of goods. Any transfer of title in goods under an agreement which stipulates that property in goods will pass at a future date upon payment of full consideration as agreed, is a supply of goods.

30. (2) Any transfer of goods or of right in goods or of undivided share in goods without the transfer of title thereof, is a supply of services.
Honda, a car manufacturer, delivered 20 cars to a public sector company, without transferring the title of car, for being used by the Officers. This is the supply of services as the title in car has not been transferred to Government but the right has been given to use the car and would, therefore, constitute supply of services and not goods.

31. (3) Any transfer of title in goods under an agreement which stipulates that property in goods will pass at a future date upon payment of full consideration as agreed, is a supply of goods.
Honda, a car manufacturer, delivered 10 cars to Government of India Undertaking, keeping the title of car to itself. However, the title will pass to that public sector company after 10 years on payment of all installments and consequently, it would be a supply of goods.

32. (2) Land and Building
(1) Any lease, tenancy, easement, license to occupy land is a supply of services.
A real estate developer gives on lease its vacant land for the purpose of setting up an Trade Fair or Sport Match or Exhibition and, therefore, it would be a case of supply of service.
Parking rights given to Parking Contractor
To given Vending machines at the Cinema Hall, Malls, Airport, Hospitals, Public places.

33. Read with Clause 5 –”RENTING OF IMMOVEABLE PROPERTY”
(2) 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.
Read with Clause 5 –”RENTING OF IMMOVEABLE PROPERTY”
A real estate developer leased out its commercial office to LG or Samsung for opening a showroom for consumable durables – it will be a case of supply of service.
A manufacturing unit for manufacture of edible oil, in an industrial area has been leased out for a period of 10 years.
Premises let out in Residential Complex for Opening Branch of “Big Bazar”, Reliance Fresh.

34. (3) : Treatment or process
Any treatment or process which is being applied to another person’s goods is a supply of services.
For Example: Jute Cloth bags have been supplied by M/s ABC Ltd to Mr X to undertake a process of “printing” and then return a bag. This will be treated as supply of services.

35. (4): Transfer of Business Assets
(1) 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, such transfer or disposal is a supply of goods by the person.
For example: KKG & Associates a firm of professionals, sells old and obsolete air-conditioner under instruction of a partner, transfer of obsolete air-conditioners are supply of goods.

36. (2)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, the usage or making available of such goods is a supply of services.
For example: KKG & Associates, a firm of professionals, provides laptop an article for his personal use then such transaction is a supply of service.

37. (3) Where any goods, forming part of the business assets of a taxable person, are sold by any other person who has the power to do so to recover any debt owed by the taxable person, the goods shall be deemed to be supplied by the taxable person in the course or furtherance of his business.
For example: KKG & Associates, a firm of professionals, firm owes Rs.10,000 to an ex-employee. Instead of paying his amount, the firm provides him a laptop as a final settlement. This will be treated as supply of goods.

38. (4) 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—
the business is transferred as a going concern to another person; or (Slump sale)
the business is carried on by a personal representative who is deemed to be a taxable person

39. For Example: KKG & Associates, a firm of professionals, transfers its business as going concern to a new partnership firm. Any goods forming part of its business will not be treated as supply of goods.

40. (5) The following shall be treated as “supply of service”-
(a) Renting of immoveable property for business or commerce. However, in this case, it speaks of renting of immoveable property for any purpose .
(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 before its first occupation, whichever is earlier.

41. Explanation.- For the purposes of this clause-
the expression "competent authority" means the Government or any authority authorized 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:-

42. an architect registered with the Council of Architecture constituted under the Architects Act, 1972; or
a chartered engineer registered with the Institution of Engineers (India); or
a licensed surveyor of the respective local body of the city or town or village or development or planning authority;

43. the expression "construction" includes additions, alterations, replacements or remodeling of any existing civil structure;
(c) temporary transfer or permitting the use or enjoyment of any intellectual property right;
(d) development, design, programming, customization, adaptation, upgradation, enhancement, implementation of information technology software;

44. (e) agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; (f) works contract including transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract;(photographer making photo, motor garage, construction of house/ building)

45. (g) 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; and (cycle, car, motor cycle).
(h) 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.

46. 6. The following shall be treated as supply of goods (a) supply of goods by any unincorporated association or body of persons to a member I thereof for cash, deferred payment or other valuable consideration. (outdoor caterer, Restaurant service).

47. PART - B CASE STUDY – ABC LIMITED

48. M/S. ABC Limited had set up a Chemical Manufacturing Unit near Varanasi. After the unit had run for 20 years, the whole plant had reduced to scrap. The Company wishes to sell the entire unit by way of auction. Accordingly, ABC Limited has engaged DEF Limited to prepare bid paper and issue add in the newspaper. DEF Limited has issued add in the newspaper. The bid was advertised in the newspaper.

49. ABC Limited received Rs. 21 lakhs towards sale of Bid documents
ABC Limited received Rs.21 lakhs towards sale of Bid documents. Pursuant thereto, XYZ Ltd formed Cartel of three intended bidders and persuaded them not to make a bid. All the three agreed subject to they being paid a sum of Rs. 25 lakhs each. Similarly, ABC Limited also spoke to three parties to persuaded them to “Jackup” the bid amount on payment of their remuneration of Rs.25 lakhs each during auctioning.

50. M/s. ABC Limited has arranged a banquet hall for the purpose of conducting the auction and also engaged a caterer for providing tea and snacks during the entire duration of auction.

51. In light of the above facts – (a) Whether any GST is payable on a sum of Rs. 25 lakhs paid to A Limited for preparation of bid? Any ITC credit would be available on this amount. (b) Whether any GST is payable on Rs.50,000 paid by ABC for newspaper advertisement ? Any ITC credit would be available on this amount.

52. (c) A sum of Rs. 21 lakhs was received during the sale of bid documents – whether any GST is payable? (d) A sum of Rs. 25 crores was received upon sale of the entire plant and machinery as a scrap – Whether the same is liable to GST?

53. (e) Whether any GST is payable by three persons who were agreed to be paid Rs.25 lakhs each and engaged by M/s XYZ Ltd, (principal bidder) and three persons agreed not to participate in the bid ? (f) Whether any GST is payable on a sum of Rs.25 lakhs each paid to three parties who were engaged by M/s ABC Limited for the purpose of jacking up the bid price during auction, if necessary?

54. (g) Whether GST of Rs. 50,000/- paid to Banquet Hall for holding auction is available as input tax credit to M/s. ABC Limited. (h) Whether GST of Rs. 50,000/- paid to Caterers for providing tea and snacks for the entire duration of auction is available as Input Tax Credit ? (i) Whether input tax credit on Rs /- paid as GST is available on rent paid to Motor Vehicle engaged by M/s. ABC Limited for the purpose of auction ?

55. (j) Whether any GST is payable on advertisement charges paid by Newspaper. Newspaper Office charged Rs.2500 as GST and claimed from ABC Ltd and ABC Ltd paid. Whether any ITC credit on Rs.2500 would be available to ABC Ltd. (k) Whether any GST is payable on a sum of Rs.5 lakhs paid to auctioneers

56. CORPORATE ISSUES (1) Sitting fee payable by the Company to the Directors – Is GST payable and by whom? (2) The Company has taken the premises on rent – The premises are owned by the Director – Whether any GST is payable on the rent paid to the Directors and by whom – whether by the Director or by the Company?

57. (3) The Company is paying salary to the Managing Director and Whole-time Director - Whether any GST is payable by the Company or by the Managing Director /Whole-time Director? (4) Whether salary paid to Partner by the Partnership firm is subject to GST or not? (5) The Company has provided Car, Laptop, Mobile to the Officers of the rank of GM and above – Whether any GST is payable?

58. (6) The Company has given gift of LED TV costing Rs
(6) The Company has given gift of LED TV costing Rs.1 lakh each to more than 100 employees of the Company and whether any GST is payable or not ? (7) The Company has received advance for supply of goods – Whether any GST is payable under advance so received? Subsequently, if no supplies were made – what will happen to the tax already paid and the advance so remitted by the purchaser?

59. (8) The Company has taken immovable property on hire for the purpose of office, warehouse, processing unit and stockyard and if GST so paid to the lessor is available as input tax credit. (9) The Company has supplied goods worth Rs. 50 lakhs to the whole-sale distributor. The terms and conditions of the supply was Ex-Works of supplier. At the request of the buyer, the supplier has incurred expenses for (a) transportation (b) insurance (c) loading and (d) unloading charges. Whether the above expenses liable to be included in supply value or not ?

60. (10) How will the export be treated under GST
(10) How will the export be treated under GST? (11) Can unutilized input tax credit be allowed as refund to the exporters? (12) When the exporter be required to pay GST in case of goods procured from unregistered person. (13) Whether goods sent by taxable person to job worker be treated as supply and will be liable to GST?

61. (14) I have multiple manufacturing unit in a State – Do I have register all my Companies separately or as a Group? (15) A registered person is sending semi- cooked food from his manufacturing unit near Varansi to his branch in Kolkata is required to pay any tax?

62. (16) A registered person is supplying manufactured goods to another person – Whether transportation charges, insurance charges, loading and un-loading charges are required to be included in the supply value? (17) A person is running his factory from a rented premises – Whether input tax paid on rent could be claimed as ITC? (18) Whether the supplier can reduce the tax liability against goods returned to him?

63. PCS – PRACTICAL ISSUES (19) Whether the Company Secretary in practice can opt for composition scheme? (20) Whether Practising Company Secretary is entitled to avail ITC on – (a) Rent paid for office premises (b) GST paid for acquiring vehicle (c) GST paid on laptop, computer, photocopying machine, A/C, Tea/Snacks, Tea/Coffee blending machine

64. (d) Stationery items purchased from un- registered dealer (e) Tax paid to Restaurant who provided lunch, snacks, tea, coffee etc.

65. (21) Whether PCS based in Varansi, who is not registered under GST, can render services in Haryana or any other State? (22) What is the liability of Registered buyer in case he obtains supply of either goods or services from unregistered supplier? (23) In case there are disputes regarding quality, quantity, technical specification between the buyer and the supplier and the goods are returned fully or partially – can excess paid component be adjusted from future tax liability?

66. (24) Whether GST is payable on the filing fee or other fees paid to Ministry of Corporate Affairs by a PCS and claimed from his clients as expenses ? (25) Will GST charged by Advocates, CAs, CS, CMA, Chartered Engineer, Canteen Contractor, Architect and other service provider would be available as ITC.

67. M/s. Balaji Tele-films Limited (An Ekta Kapoor Enterprise), based at Maharashtra, wishes to shoot a film at Delhi. Whether the input tax credit would be available to them on the following activities:-
a) AC Bus/Car hire charges from their Studio to Mumbai Airport;
b) GST paid to Travel Agent for booking of air- tickets.

68. c) Food/drinks charges during flight - whether airline Will CGST/SGST/IGST. d) Volvo Bus/AC Cars hired for transportation of the entire team from Airport to Hotel Hayat Regency, Bikaji Cama Place, New Delhi. e) GST paid on Hotel stay, food, drinks, other services availed at the Hotel.

69. f) GST paid on the bill of beauty parlor which was visited by the Actress. 
g) GST paid on Gym/Spa services availed by the Actors.
h) Service tax paid for the club facilities availed at the club of the hotel;

70. i) GST paid on transporter for transportation of team and crew members from Hotel to shooting site at Qutab Minar. j)GST paid on food, snacks, articles of consumption, drinks, tea, coffee, soft drinks supplied by the outdoor caterer Taj Skypack. k) Contractor engaged for providing lighting at the venue for shooting the film in the evening. l) Whether input tax credit of GST paid would be available on the supply of either goods or services.

71. PART C LEVY OF GST ON LATE FEE, PENALTY AND DAMAGES

72. CLAUSE 5 (e) OF SCHEDULE-II TO CGST ACT, Agreeing to the obligation to refrain from an act, or to tolerate an act or situation, or to do an act; read with Section 7(1)(d) of CGST Act.

73. This should cover following under GST net.
Demurrage charges for not
clearing goods within
prescribed period.
Cancellation charges
charged by hotels, airlines,
builders, contractors etc.

74. (Late Delivery Charges) /Liquidated Damages.
L D charges
(Late Delivery Charges)
/Liquidated Damages.
Non-complete fees
payable for agreeing
not to compete for a
particular period.

75. Forfeiture of deposit or
advance as penalty (like
quality, late delivery,
violation of any term
of contract etc.)

76. Agreeing not to
appear for opposite
party in Court.
Penalty for breach
of contract.

77. Advance forfeited for cancellation of agreement, security deposit forfeited for damages done, demurrage are subject to service tax (now GST) – Para of CBE&C’s ‘Taxation of Services: An Education Guide; published on published on

78. What is the treatment of deposit or advance under GST valuation?
Under what circumstances the advance be treated as deposit and its impact on other allied laws.
An owner of a commercial building charges rent from its tenants and charges GST for the same.
He also charges electricity charges to his tenants on actual consumption based on sub meter reading.
No margin is charged by Landlord on electricity. Whether such electricity charges are liable for GST?

79. What is the treatment of quantity discount under GST regime?
Free/subsidized food provided to employees of the company is chargeable under GST. Can this supply be treated as outward supply and ITC on Outdoor catering service be availed?

80. Would an employer be eligible to claim ITC incurred on the following expenses with respect to the employee:
Gift purchased for distribution to employees eg. Diwali gifts.
Reimbursement of expenses incurred by employee, eg, hotel accommodation, cab services, flight charges, mobile bills.
A 2D-3N stay in a resort as part of annual perks

81. Head Office in Varanasi transfers capital goods to branch located in Mumbai. No consideration is charged for the same. What are the tax implications?
In case of supplies made to related parties, whether the time limit of 180 days.

82. PART-D “QUERIES AND REPLIES”

83. Whether following activities are covered under “supply” or not?
[based on FAQ released by CBEC in Newspapers or on website)
S.No.
Question
Answer 1
Whether stipend paid to intern is supply? (Q.7,FAQ by CBEC-Part-II in the Newspaper]
Stipend paid to interns will be employer-employee transactions. Hence, not liable for GST. 2.
Whether salary by partnership firm to Partners as per Income Tax Act liable to GST? (Q.8.21, FAQ by CBEC-Part-II in the Newspaper]
Salary will not be liable for GST. 3.
Employer provides bus service, meal coupon, telephone at residence, gives vehicle for official and personal use, unform and shoes, any GST? (Q.18,FAQ FAQ by CBEC-Part-II in the Newspaper]
Where the value of such supplies is in the nature of gifts, no GST will apply till value of such gifts exceeds INR 50,000/- in a financial year.
However,in the opinion of the authors, vehicles for official use, uniform and shoes are incurred in the course and in relation to employment; and are not gifts.

84. 4.
What kinds of facilities provide by employer to employee would be liable to GST? For instance, whether club membership provided will be considered as “service”? (Q.43, FAQ by CBEC-Part-IV in the Newspaper]
The compensation to employees in the form of money is not supply.
However, fringe benefits are supply of exempted. These are transactions in furtherance of business and even if supplied without consideration, the same are deemed supply.
However, in the opinion of authors, if fringe benefits are part of CTC and salary package, it would neither be goods nor service in terms of Sch III/entry 1. 5.
Will giving away essential commodities by a charitable institution by taxable activity? [Q.4-Page 22,FAQ by CBEC]
In order to be a supply which is taxable under GST, the transaction should be in the course or furtherance of business. As there is no quid pro quo [‘something for something’ or ‘this for that’] involved in supply for charitable activities, it is not a supply under GST.

85. 6.
Are self-supplies taxable under GST? [Q.7-Page 49, FAQ by CBEC]
Inter-state-Yes
Intra-state self-supplies are not taxable unless opting for registration as business vertical.

86. 7.
Whether transfer of title and/or possession is necessary for a transaction to constitute supply of goods? [Q.8-Page 49,FAQ by CBEC]
Title as well as possession both have to be transferred for a transaction to be considered as a supply of goods in terms of Schedule II (1) (a).
In case title is not transferred, the transaction would be treated as supply of service in terms of Schedule II(1)(b).
In some cases, possession may be transferred immediately but title may be transferred at a future date like in case of hire purchase arrangement. Such transactions will also be termed as supply of goods.

87. 8.
When would it be construed that I have made a supply of services involving temporary transfer or permitting the use or enjoyment of any intellectual property right? (Q.18, FAQ by CBEC-IT)
Generally, the End User Licence Agreement (EULA) is the legal contract between a software application author or publisher and the user of that application governing the usage. The agreement is renewable and/or could be amended from time to time. To find out as to whether there is an element of supply involved when software is delivered to its customer, the terms and conditions of EULA are material.
The contract for supply therefore assumes significance in this test to decide whether or not there has been ‘temporary transfer of permitting the use or enjoyment of any intellectual property right’.

88. 9.
An individual buys a car for personal use and after a year sells it to a car dealer. Will it be a supply in terms of the GST Act?[Q.10-Page 49, FAQ by CBEC]
No, because supply is not made by the individual in the course or furtherance of business. Further, no input tax credit was admissible on such car at the time of its acquisition as it was meant for non-business use.
10.
What is the procedure/documents required for sending free replacement to the customers at free of cost? [Q.18,FAQ by CBEC-Part-IV in the Newspaper]
Where free replacement is provided to the customers without consideration under warranty, no GST is chargeable on such replacement. In such cases, goods may be sent on delivery challan as provided in rule 55 of the CGST Rules.

89. 11.
An Original Equipment Manufacturer (OEM) has an obligation to provide repair services to their customers in the warranty period. This activity is outsourced by OEM to ‘D’, who bills the OEM for the services he provides to the customer. What is the tax liability of ‘D’? [Q.21, FAQ by CBEC-IT]
‘D’ is providing service to the OEM. GST is payable on the value of any supplies made by ‘D’ to OEM i.e. in respect of bills raised by ‘D’ on the OEM

90. 12.
Whether advertising and communication material (banners/hoardings/posters) provided to distributors would be treated as supply in the course of business by the company thereby not requiring any reversal of ITC. [Q.1,FAQ by CBEC Gold & Jewellery]
Where the material is provided free of cost: This would not amount to a supply and hence no tax is payable on such transaction and in such a case credit be reversed in accordance with Sec 17(5) of the GST Act.
Where the material is provided for a consideration: This would amount to a normal supply.

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