Taxable event is which on its occurrence creates a liability to pay tax.

Applicable for Nov, 2019 / December, 2019 Attempt.

Taxable event in GST is supply of goods / services or both. By CA. Keval Mota
Supply under GST (Section 7, 8 of CGST Act, 2017)
Note: Provisions of CGST Act, 2017 shall also be applicable for Inter-
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state transactions vide S. 20 of IGST Act, 2017.
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Supply should be for consideration & in course or furtherance of business Schedule I Activities r/w 7(1)(c) of CGST Act, 2017: - (Entries are as below)
[S. 7(1)(a) of CGST Act, 2017 r/w Sch. I to CGST Act] Neither goods nor services [S 7(2) r/w Sch. III] (Entries are as below)
 Supply includes all forms of supply of goods or services such as sale, transfer, barter, 1) Services by an employee to the employer.
3) Supply of Goods By: - Principal to Agent (Selling Agent) / Agent to Principal (Purchasing Agent) (r/w
exchange, lease, rental etc. 2) Services by any Court or Tribunal.
Circular No.57/31/2018-GST dated September 4, 2018): -
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 Consideration means everything received or recoverable in return for supply / not for 3) Functions performed by MPs, MLAs, etc.
effecting supply i.e. Non-Compete Fees. 4) Funeral, burial, crematorium or mortuary including transportation of the deceased.
 Supplies made without consideration will also be supply if specified in Schedule I of CGST Act, 5) Sale of land and completed building (construction of a complex, building, civil structure or a part thereof,
2017 [S. 7(1)(c) of CGST Act] Agent issues invoice in Agent does not issue invoice in including a complex or building intended for sale to a buyer, wholly or partly, where the entire
own name to recipient own name to recipient consideration has been received after issuance of completion certificate, where required, by the
Notes: - competent authority or after its first occupation, whichever is earlier.)
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It is supply between It is not a supply between 6) Actionable claims, other than lottery, betting and gambling
 Goods means every kind of movable property other than money and securities but principal & Agent principal & Agent 7) Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory
includes actionable claim, growing crops, grass and things attached to or forming part without such goods entering into India.
of the land which are agreed to be severed before supply or under a contract of supply. 8) (a) Supply of warehoused goods to any person before clearance for home consumption;
(If agent is issuing invoice in his own name, he has to take compulsory registration (S. 24 of CGST) (b) High-Seas Sales
- Examples of Actionable claims are unsecured debt, bills of exchange etc.
- All Actionable claims are goods but only lottery, betting & gambling are supply (Sch. III). 4) Import of Service by Taxable Person (CGST Amendment Act, 2018)
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Supply should be made by Taxable person & shall be taxable in order to be treated
 Service means anything other than goods, money & securities but includes activity as taxable supply.
relating to use of money / conversion for which separate consideration is charged. Service
If for Consideration – Always Supply If without consideration - & from
includes facilitating or arranging transactions in securities. (CGST Amendment Act,
whether or not in furtherance of related party for furtherance of
Composite & Mixed Supplies (Sec 8)
VA
2018)
business [S. 7(1)(b)] Business then its supply.
[Para 4 of Sch. I]
Tax Rate/ Place of Supply / Time Tax Rate/ Place of Supply / Time of
To remove anomaly, law has classified certain activities into Goods/Services [S. 7(1A)] r/w Schedule II to
CGST Act, 2017 (Note: Below are not entry numbers) of Supply etc. will be as per pre- Supply etc. will be as per supply
Schedule I Activities r/w 7(1)(c) of CGST Act, 2017: - (Entries are as below) dominant supply. having highest rate of tax.
1) Transfer of Title in Goods – Goods
Note: - Schedule I activities are an exception to “payment of invoice value within 180 days from 2) Title in Goods under an agreement that property shall pass at future date - Goods
date of invoice” to supplier as mentioned in Section 16 of CGST Act, 2017 (Refer ITC Chapter for 3) Right / undivided share in goods without transfer of title in them - Services Description Composite Mixed
KE
more details) 4) Transfer of Right in use (no title) – Services
5) Lease, Tenancy, Easement, Licence to Occupy land, letting out & Treatment or Process – Services Naturally Bundled Yes No
1) Permanent Transfer of business assets where ITC has been availed;
(Activities in respect of residential dwelling are exempt vide NN 12/2017 – CTR. Can be supplied separately No Yes
Notes: -
6) Business Assets
- There is no requirement of another person in the case of ‘disposal’. Therefore, if a One is pre-dominant Yes No
 Assets of Business transferred with/without consideration – Goods
business asset on which credit is claimed has been discarded, the transaction shall Priced Separately Yes/No No
 Goods put to private use – Services
be regarded as a supply. Supplied Together Yes Yes
- A registered person shall not comply with both the provisions i.e. reverse ITC  Ceases to be Taxable person, stock / assets deemed to be supplied (except going concern & business
17(5)(h) as well as pay tax as it is supply under Schedule I, compliance with any of carried on by personal representative) – Goods
7) Renting of Immovable property, under construction building (building where consideration has been Other Important Points / Circulars: -
A.
the above will suffice.
- There is no permanent transfer in case of goods sent for job work. Thus, credit will received before completion certificate or first occupation whichever is earlier), Works Contract Service,
1) The movement of artwork from artist to art galleries shall not be constituted as supply as the same is sent on
be available to principal even if goods are given to Job Worker. Restaurant – Services
approval basis and the supply takes place when buyer selects a particular art work displayed at the gallery.
8) Temporary transfer or permitting the use or enjoyment of any intellectual property right - Services
2) Inter-state movement of modes of conveyance b/w distinct persons is not a supply (unless for further supply).
2) Supply of Goods/Services between related persons / distinct persons in course or 9) Development, design, programming, customisation, adaptation, upgradation, enhancement,
If given for R&M, only R&M Charges are supply.
furtherance of business. However, Gifts by employer to employee (related person) less implementation of information technology software - Services
3) GST not leviable on fees/ penalty / pre-deposit charged by Consumer Dispute Redressal Commission.
than or equal to Rs. 50,000/- are not a supply. [There is a list of related persons, employer 10) Agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; -
4) Cash Calls by JV to Purchase Asset – Not a Supply; if paid as charges to member who owns such asset will be a
employee is one of them] Services
supply of service
11) Supply of Goods by Unincorporated Association to Members – Supply of Goods
5) Original Equipment Manufacturer Supplying Free of Cost Moulds & Dies to Component Manufacturer it is not
Notes: – Classification of Goods or Services through Circulars: - a supply.
- If gift of > Rs. 50,000 is given then ITC can be claimed on such gifts even if Section 6) Supply of seized / detained/ used goods by govt to Regd person – RCM u/s 9(3), otherwise FCM. (NN 36/2017-
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17(5)(h) of CGST Act calls for reversal of ITC on sale of gifts (to be discussed in ITC) 1) In the case of printing of books, pamphlets etc. where only content is supplied by the publisher or the CTR)
- Cash gifts of any value, given that the ‘transaction in money’ is not a subject matter person who owns the usage rights, supply of printing of the content supplied by the recipient of supply 7) Activity of fabrication and fitting and mounting of bus bodies on chassis supplied by other party is a composite
of supply; is supply of service. Printing of envelopes, letter cards etc. are supply of goods. supply of service with supply of goods, i.e., bus bodies, being principal supply and same is supply of goods.
- A service can also constitute a gift (such as gift vouchers for a beauty treatment) 2) Transfer of Tenancy Rights – Supply of Service (Also Known as “Pagadi” System) – 8) As per the Production Sharing Contract (PSC) between the Government and the oil exploration & production
- Right of the employee in terms of the employment contract / employee policy of the - Tenancy Premium earned on residential units by landlord / residential units by outgoing tenant - contractors (licensor/lessor and licensee/lessee), in case of a commercial discovery of petroleum, the
entity, then such gift shall be treated as emoluments arising out of the employment Exempted vide exemption entry 12 of Notification 12/2017-CT(Rate) contractors are entitled to recover from the sale proceeds all expenses incurred in exploration, development,
(including perquisites), and cannot be treated as a supply as per Sch. III to CGST Act, - Tenancy Premium earned on other than residential units by land lord/ outgoing tenant – Taxable production and payment of royalty. Portion of the value of petroleum which the contractor is entitled to take
2017. (Example – Pre-mature termination as per employment terms are not supply) - Share of tenancy premium received on such units from outgoing tenant by the landlord on sale of in a year for recovery of these contract costs is called “Cost Petroleum”. Cost petroleum is not a consideration
tenancy rights by such outgoing tenant – Taxable for service to GOI and thus not taxable. However, cost petroleum may be an indication of the value of mining
3) Priority Lending Certificate – Supply of Goods or exploration services provided by operating member to the joint venture, in a situation where the operating
4) Re-treading of tyres– In re-treading of tyres, which is a composite supply, the pre-dominant element member is found to be supplying service to the oil exploration and production joint venture. 1
is the process of re-treading which is a supply of service. However, Supply of re-treaded tyres is supply
of goods. (MCQ – November, 2019 New Syllabus)