Topic Name -What is the taxable event under GST
Taxable event under GST is supply of goods or services or both. CGST and SGST/ UTGST will be levied on intra-State supplies. IGST will be levied on inter-State supplies.
What is meant by Taxable Event
Taxable event is that event, happening of which attracts liability to tax. Taxable event is a very important event in any law as the levy and collection of tax is based on the happening of the taxable event. Although, the taxable event happens to be at a particular point of time, the levy and collection of such tax may be postponed for administrative convenience, to a later date.
The term, “supply” has been inclusively defined in the Act. Supply includes 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.
Supply also includes: import of services for a consideration whether or not in course of furtherance of business, the activities specified in schedule I (without consideration) and the activities as referred in schedule II.
The meaning and scope of supply under GST can be understood in terms of following five parameters, which can be adopted to characterize a transaction as supply:
1. Supply of goods or services. Supply of anything other than goods or services does not attract GST
2. Supply should be made for a consideration
3. Supply should be made in the course or furtherance of business
4. Supply should be made by a taxable person
5. Supply should be a taxable supply.
While these five parameters describe the concept of supply, there are a few exceptions to the requirement of supply being made for a consideration, in the course or furtherance of business and made by a taxable person.
Further Schedule III (read with section 7) to the CGST Act, 2017 specifies activities which shall be treated as neither supply of goods nor supply of services or outside the scope of GST. This includes:
Services by an employee to the employer in the course of or in relation to his employment.
Services by any court or tribunal (time being in force).
Services by MPs, MLAs, Panchayats, Municipalities and member of other local authorities.
The duties performed by any person who had any post in pursuance of the provisions of the constitution in that capacity.
Services of funeral, burial, crematorium or mortuary including transportation of the deceased.
Sale of land (subject to clause (b) of paragraph 5 of schedule II) and sale of building where the entire consideration has been received after completion certificate is issued or after its first occupation.
Actionable claims are included in the definition of goods, however, Schedule III provides that actionable claims other than lottery, betting and gambling shall be neither goods nor services.
The 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.
Accordingly, it has been notified that the Central Government or State Government or any local authority in which they are engaged as public authority, by way of any activity in relation to a function entrusted to a Panchayat under article 243G of the Constitution is neither a supply of goods nor a supply of service.
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About Tabish Ahmad
Tabish Ahmad is an Advocate at Patna High Court works in the area of Corporate Law and Corporate Litigations. Tabish represented many clients in complex legal issues focusing on corporate compliance. As An Advocate it is the duty towards nations to make the citizen and businessmen aware about laws and compliances in order to comply as law abiding citizens.
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