In the current article we will discuss about activities or transactions which shall be treated neither as a supply of goods nor a supply of services. The levy of GST comes only if the goods or services comes under the purview of supply so the below activities are not to be treated as supply hence no GST levy will come

Items out of GST – Schedule III of CGST Act, 2017

As per schedule-III of CGST Act there are 6 following Activities or Transactions Which Shall Be Treated neither As A Supply Of Goods Nor A Supply Of Services-

1. Service by a employee to employer in the course of or in relation to his employment

Services provided in the course of employment by the employee in the course of employment are outside the ambit of supply. In case any service is provided by employee not in the course of employment then it would be considered as supply of service as he is rendering his personal services to the entity

If service is provided by casual worker to employer who gives wages on daily basis then these services provided by worker in the course of employment hence not included in supply.

2. Services by any court or tribunal established under any law for the time being in force.

3. The functions performed by

  • the members of parliament
  • members of state legislature,
  • Member of panchayat
  • Members of municipalities
  • Members or other local bodies
  • The duties performed by any person who holds any post in pursuance of the provisions of the constitution in that capacity (Eg Diplomats, Governors etc)
  • The duties performed by any person as a chairperson or a member or a director in a body established by Central government or a State government and who is not deemed as an employee before the commencement of this clause.

4. Services of Funeral, burial, cremation or mortuary including transportation of the deceased.

5. Sale of land and subject to clause (b) of paragraph 5 of Schedule-II

There is no GST on sale of Land however rental, lease of land & building will attract GST, also as per clause (b) of paragraph of Schedule-II, construction of a complex, building, civil construction would also be attracting GST.

6. Actionable claims other than “Lottery, betting and gambling

Actionable claim is out of the scope of GST, we must understand the meaning of actionable claim. As per the meaning given in  transfer of property act 1832 “Actionable claim” is a claim to any debt, other than a debt secured by mortgage of immovable property or by hypothecation or pledge of movable property, or to any beneficial interest in movable property not in the possession, either actual or constructive, of the claimant, which the civil courts recognize as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional or contingent.

However actionable claim is outside the purview of GST but GST on lottery, betting and gambling there is also reverse charge liability on sale of lottery tickets.

In case of any doubts in the current topic or provisions of Indirect taxation (GST and CUSTOMS) then you may contact us at [email protected]

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One Comment

  1. SN says:

    Hi Abutpurva,

    Nice Article. Could you please elaborate the position on GST on employees providing services to other units located across in India.

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June 2021