Services means Other than Goods, money and securities; 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.

 “Goods’’ means every kind of movable property other than money and securities but includes 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 the contract of supply

Money and securities are neither ‘goods’ nor ‘services’ for the purpose of GST Law

Concept Brief
Types of Services 1. Those services that are commonly understood as services;

2. Those that are goods but are to be treated as services;

3. Transaction in money in the nature of an activity relating to the use of money or its conversion for which a separate consideration is charged. Eg. Conversion of Rupees to US dollars

Employer Employee relation Services from employee to employer in relation to employment are not ‘supply’, if services are provided free of charge to all the employees by the employer then the same will not be subjected to GST, provided appropriate GST was paid when procured by the employer

It follows, therefore, that if such services are provided free of charge to all the employees by the employer then the same will not be subjected to GST, provided appropriate GST was paid when procured by the employer. The same would hold true for free housing to the employees, when the same is provided in terms of the contract between the employer and employee and is part and parcel of the cost-to-company (C2C).

Exception recent judgment of AAR in case of Canteen Expenses to Employee was held liable to GST

Threshold CGST Act, 2017 provides that, gift exceeding Rs. 50,000/- by an employer to employee will be a supply even if made without consideration as employee is also deemed as related person as per explanation to section 15 of CGST Act, 2017. Hence, any gifts for a value not exceeding 50,000/- in a financial year will not qualify as supply and will not be liable to tax. Please bear in mind that gifts in excess of `5,000/- given by an employer to an employee is taxable as perquisite and when it is subject to income tax it cannot again be taxed as a supply in GST. This conflict must be kept in mind while examining GST implications on gifts.
Supply of Services – key element 1. services include even such transactions which involve supply of goods.

2. words used to define supply such as sale, disposal, transfer, rental, lease, etc. appear to originate in relation to goods, but extended to apply to services also.

3. transactions involving goods are more easily verifiable during their supply, whereas, transactions involving services lack this element of verifiability.

4. when transactions involve both goods and services (composite) uniformity in application of the rules of supply maybe doubtful

Supply Includes
Includes/ elements of completion Inter

Vivos

Money

consideration

Willing

buyer

Willing

seller

Permanent

alienation

Valid

object

Sale
Transfer x/√
Barter x
Exchange x
License
Rental
Lease
Disposal x √/x

Intervivos means – a transfer/gift that takes only once

Implied Supplies
Form of Supply Inter

Vivos

Money

consideration

Willing

buyer

Willing

seller

Permanent

alienation

Valid

object

Permanent transfer/ disposal of business assets N/A* √/ x √/ x
Supply Related Party x N/A* N/A x
Supply between Principal & Agent x N/A* N/A
Import of Services x N/A* N/A

* Treated as supply without consideration even if any consideration flow is present and their value for tax purposes will be as determined by GST Valuation Rules

In other words, transactions that fail to satisfy the test of sale for want of money-consideration do not escape the incidence of GST.
Composite Supply means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply
Mixed Supply means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply.
every supply should be independently analysed as follows:

Description Composite Supply Mixed Supply
Naturally bundled Yes No
Taxable supplies Yes Yes / No
Supplied together Yes Yes
Bundling in the ordinary course of business Yes No
Can be supplied separately No Yes
One is predominant supply for recipient Yes No
Other supply is not ‘aim in itself’ of recipient Yes No
Each supply priced separately Yes No
Combinations:
i All supplies are goods Yes Yes
ii All supplies are services Yes Yes
iii One supply is of goods and other supply is services Yes Yes
Invoice time limit of 30 days within which the invoice is required to be issued in respect of supply of services
Import It is important to mention that the word ‘supply’ includes import of a service, made for a consideration and whether or not in the course or furtherance of business. This implies that import of services even for personal consumption would qualify as ‘supply’ and therefore would be liable to tax. This would not be subject to the threshold limit as tax is expected to be payable on reverse charge basis, and the threshold limits do not apply in case of supplies attracting tax on reverse charge basis. Please note that, import of services is included within the meaning of ‘supply’ under the CGST / SGST Acts. However, it would be liable to IGST since it would not be an intra-State supply.
Consideration Monetary/Non Monetary given by anyone except CG/SG, should be lawful, obligatory, certain and excludes deposit.

There are instances as slated above in the table implied supply where consideration is not criteria for “supply”

Viz., Permanent disposal of assets when ITC was availed, RPT, Supply between Principal and Agent & Import of services.

Some examples Travels Pvt. Ltd., a travel agent books ticket for a customer Mr. X. Travel agent raises invoice on customer Mr. X for transportation of passenger by air of 10,000 and his commission of 500. The entire amount of Rs. 10,500 is not his consideration. The amount of Rs. 500 retained by the air travel is to be considered as his consideration.

Eg. Mr. R during long drive with his wife Manju violated traffic rules and was imposed fine of Rs. 1,000. The amount received as fine or penalty for violation of statutory provisions will not be considered as consideration.

Following generally not considered as consideration:

• Grant of pocket money

• Gift or reward (which has not been given in terms of reciprocity) or

• Amount paid on alimony for divorce

Eg. Deposits: If refunded then, it is not a consideration. Therefore the same does not attract GST. If tax has already been paid the taxpayer would be entitled to refund. If not refunded then, it is relating to a service, attract GST.

Eg. Subsidy given by the Government to benefit the farmers cannot be considered an additional consideration

Key element of Supply Supply should be made in furtherance of business (excl Import of services (but OIDAR is out of tax ambit)), supply should be made to taxable person within taxable territory.

Source- Handbook on GST for Service Provider by ICAI

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