It has always been a complex question for every one of us whether GST would be applicable on any specific goods/service. Sometimes it leaves one under the doubt whether GST is really applicable or not. So I had tried by these write-up to give clarity for confirming the applicability of GST on any specific goods/services.

Levy of GST arises under section 9 of CGST Act, which state that goods/service except for alcoholic liquor for human consumption shall be collected and paid by the taxable person. Therefore, the taxable person becomes liable for paying and collecting GST.

To collect GST transaction must qualify as a taxable supply, the following components are compulsory:

  • The transaction must involve either goods/services .( explained hereunder)
  • Such goods or services should not be specified under Schedule III (list of transaction considered neither as good/services)
  • The transaction should fall within the meaning of ‘supply’ in terms of Section 7 of the CGST Act;
  • The supply should be leviable to GST (explained above)

Section 2(55) of CGST defines “goods” as every kind  movable property except money and security and including actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply;

The word GTS close-up and calculator on a brown wooden background.

Section 2(102) defines “services” as anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged;

Further to go with the definition of the “supply” under section 7 of CGST Act,2017 which 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.

Any supply would fall under 8 classes of transactions (sale, transfer, barter, exchange, licence, rental, lease or disposal) and a consideration plays a role to determine the applicability of GST as the definition of business is so wide that it cover mostly all the areas in “trade, commerce, manufacture, profession, vocation, adventure, wager or any similar activity”), .“Even it is for a pecuniary benefit or not”, and regardless of the “volume, frequency, continuity or regularity” of the activity. There are some exception to the transaction without consideration been considered as supply which are listed in schedule 1 of CGST Act, 2017.

Therefore one must consider the definition of goods, service, supply, taxable supply and charging section for levy of GST to conclude applicability of GST .

Author Bio

Name: Heet Shah
Qualification: CA in Job / Business
Company: SHR & Co.
Location: Mumbai, Maharashtra, IN
Member Since: 22 Dec 2018 | Total Posts: 20
I am a part of the one Mumbai Based CA firm serving from last 50 years to the society . I am engaged especially in the field of Indirect taxation from last 4 years. View Full Profile

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4 Comments

  1. kashupatel22@gmail.com says:

    Greetings!
    Very Nice article
    Whether Sale of agriculture Land is covered under definition of supply?? if not than it covered under non-taxable supply??? If yes whether for registration purpose it includes in the definition of aggregate turnover

    1. Heet says:

      Thanks Kashu!!

      See land is an immovable property and neither it is included in the definition of a good or service. Futhermore schedule 3specifically prescribes sale of land not to be considered as good nor service. So it is not a supply. So question of taxablity does not arise at all. It could be considered as non taxable supply.

      Yes it would be considered in calculating the aggregate turnover for regn purpose.(Refer defn of aggregate turnover for further clarity )

  2. Heetshah says:

    Thanks a lot !!! Mr Summit for your taking your valuable time to reviews my write-up and share your views to improve that will definitely help me improve for further articles. I tried to create a concise note for confirm GST applicability on the goods and service. However i missed on some area as you mentioned . I will note that next time onward that every aspects of the articles get covered.

  3. SUMIT CHAKRABORTY says:

    CONTENT VERY SHALLOW
    ERRONEOUS CLAUSE RECORDED IN DEFINING GOODS
    NO MENTION OF EXEMPTED SUPPLY WHICH IS REQUIRED TO KNOW TO LEVY TAX>

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