Types of supply under GST
For a registered taxpayer, supply under GST can be classified into two major categories – Taxable supplies and Non-taxable supplies.
Supplies where there are more than one goods and/or services involved
While traders can supply goods and services individually, they can also supply them as a bundle or a set. Following are the methods of supply:
Read more about Composite and Mixed Supply.
Supply under GST
In the GST system, a taxable event is Supply. For the government to consider an event as a supply, it should have the following characteristics.
- Supply of goods or services – It is a supply of goods when a transaction takes place. For example, purchasing a bottle. Supply of service is when there is a transfer of right without transfer of title. For example, availing taxi-cab services.
- Taxable – Supply of goods or services can either be taxable or tax-exempt. Taxable supplies are goods and services that attract GST. Tax-exempt supplies include supply of goods or services that belong to a specific category of the GST Act.
- A taxable person should make the supply – A taxable person is someone who registers under the GST, or is a liable to register. People can also voluntarily register. Supply between two non-taxable people is not a supply under GST.
- Within a taxable territory – Taxable territory means any place in India.
- Supply made in the course of business – GST is applicable only on business transactions. Hence, a transaction made for business purpose is supply under GST. If someone supplies goods for personal purposes, it will not be considered as a supply under GST.
- In exchange for cash or reward (consideration) – Consideration means a barter of goods or services, or payment made for a supply in money, or in kind. Advance payment or deposit towards supply also falls under consideration. According to CGST Act, the following activities that will be treated as supply even if made without consideration:
- When a business permanently transfers or disposes its assets for which taxpayers availed input tax credit.
- Supply between two related or separate persons for business purposes.
- When a taxable person imports services from a related person, or from his or her own business outside of India for business purposes.
- Supply of goods by an agent on behalf of the supplier or supply that an agent receives on behalf of a customer.