How does one confirm GST applicability on any goods/services?

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;

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 .