Types of Supply under GST Regime, Miscellaneous Supply Under GST

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Types of Supply under GST: The year 2017‐18 was a unique year for the Indian economy. The year ushered in two major reforms which have the potential to transform India. The first was the introduction of the Goods and Service Tax (GST) and this was followed by the operationalization of the Insolvency and Bankruptcy Code. While both these major changes have been brought in during the year the results are slow in coming. The introduction of GST was not a smooth operation.

There were too many rates, too many separate jurisdictions and legislations resulting in multiple filing and large number regulatory/compliance requirements. There were also initial technical difficulties. The good news is that most of these issues have been taken seriously and are getting sorted out. GST is already showing results with large number of new registrations and it is hoped that GST will help to spread the boundaries for the formal economy.

Types of Supply under GST

Types of Supply under GST

Miscellaneous Supplies under GST Regime except Section 7 of CGST Act

  • Inward Supply
  • Outward Supply
  • Composite Supply
  • Mixed Supply
  • Non Taxable Supply
  • Nil Rated Supply
  • Exempted Supply
  • Zero Rated Supply
  • Non GST Supply
  • Inter State Supply
  • Intra State Supply
  • Continuous Supply

Inward Supply

Inward Supply in relation to a person shall mean receipts of goods and/or services whether by purchase, acquisition or any other means and whether or not for any consideration. In simple word, any types of purchases are called inward supply.

Outward Supply

Outward Supply in relation to a person shall mean supply of goods and/or services whether by sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to make by such person in the course or furtherance of business. In simple word, any types of sales are called outward supply.

Composite Supply

Section 2(30) of CGST Act, Composite Supply means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. Composite Tax treatment Under Composite supply, the tax rate of the principal supply will apply on the entire supply.

For Example: A hotel in Delhi provides breakfast, Lunch, Dinner, Taxi Services, a swimming pool and spa services along with your hotel room you can use all of the other services only if you stay in the hotel. Therefore, this is a composite supply and it cannot be sold separately. The accommodation is principal supply, and the other components of the package are dependent supplies.

Mixed Supply

Section 2(74) of CGST Act, Mixed Supply means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply.

Tax Treatment under Mixed supply, the tax rate of the item which has the highest rate of tax.

For Example: A Supply of Package consisting of sweets, chocolates, dry fruits, cakes, fruit juice and toys when supplied for a single price are a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied separately.

Details about Mixed Supply and Composite Supply are mentioned Under Section 8 of CGST Act

Non Taxable Supply

Section 2(78) of CGST Act, Non taxable supply means a supply of goods or services or both which is not leviable to tax under CGST Act or under the IGST Act.

Nil Rated Supply

Nil Rated supplies are those supply of goods, or services, or both which are included in the Schedule of Taxes but the rate of Tax is “NIL”.

Nil Rated Supply is the supply of goods and services that have 0% GST.

Exempted Supply

Exempted supplies have been defined under section 2(47) and means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply;

Exempted Supply is the supply of goods and services that does not attract GST and allows no claim on Input Tax Credit. Exempted supply of any goods or services is one which attract Nil Rate of Tax or which may be wholly exempt from tax. It includes Non Taxable supply.

Zero Rated Supply

Section 2(16) of IGST Act, Zero Rated Supply include

  • a. supplies made to any countries other than India and
  • b. Supplies made to customer located in Special Economic Zone or SEZ Developers.

GST is not applicable in India for Exports. Hence, All Export supplies of a taxpayer registered under GST would be classified as Zero Rated Supply.

Non GST Supply

Non-GST supplies are petroleum products and alcoholic liquor for human consumption. Non GST Supply is the supply of goods and services that does not come under the purview of GST while other taxes may be applicable.

Inter State Supply

Inter State Supply is a supply of goods and services, where the location of the supplier and place of supply are in –

  • a. Two different states
  • b. Two different Union territories or
  • c. A state and a Union territory

It also includes import of goods or services into the territory of India.

  • a. When the supplier is located in India and the place of supply is outside India.
  • b. To or by a SEZ Developers or a SEZ Unit
  • c. In the taxable territory, not covered elsewhere.

Intra State Supply

Intra state supply is a supply of goods or services where the location of the supplier and place of supply of goods are in the same state or same union territory.

Exceptions:

  • a. Supply of goods to or by SEZ Developer or SEZ Unit
  • b. Goods Imported into the territory of India.
  • c. Supplies made to a Tourist*

Section 25 of CGST Provide Every Person who makes a supply from the territorial water of India shall obtain registration in the coastal state or Union territory where the nearest point of the appropriate baseline is located.

Continuous Supply

Continuous Supply of Goods: It means a supply of goods which is provided on continuous basis under a contract, whether or not by means of wire, cable, pipeline or other conduit, and for which the supplier invoices the recipient on a regular or basis and includes supply of notified goods.

Continuous Supply of Services: It means supply of services which is provided continuously or on recurrent basis, under a contract, for a period exceeding 3 months with periodic payment obligations and includes supply of notified services.

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