Summary: A “taxable event” in GST refers to an occurrence that triggers the liability for tax. GST applies to intra-state supplies of goods and services, except for alcoholic liquor for human consumption and certain other alcohols. The value of supply is determined by Section 15, with a GST rate of up to 20%. Under GST law, supply includes sale, transfer, barter, rental, and leasing for consideration in business activities. Transactions by non-individual entities involving their members or vice-versa, or import of services, are also considered supplies. Certain activities, even without consideration, are still taxed, such as the permanent transfer of business assets with input tax credits or supplies between related persons in the course of business. Transactions between distinct persons with separate GST registrations are treated as supplies. As of April 1, 2025, services supplied between branches with different GST registrations will require GST payments, a change from the previous system where no payment was needed if full Input Tax Credit (ITC) was available. Additionally, cross-charging for services between branches and headquarters is subject to GST if distinct GSTINs are involved.
CHARGING SECTION IN GST
GST is on – (a) intra – state supplies (b) of goods and services or both (except supply of alcoholic liquor for human consumption and un-denatured extra neutral alcohol or rectified spirit used for manufacture of alcoholic liquor, for human consumption.
Value will be as per section 15. Rate of GST will be notified by CG – max 20%
SUPPLY AS PER GST LAW
- All forms of supply of goods or service or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business.
- Activities or transaction by a person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration
- Import of services, for a consideration whether or not in the course or furtherance of business.
Activities or transactions which are neither supply of goods nor supply of services
Activities or transaction undertaken by the CG, a SG or any local authority in which they are engaged as public authorities, as may notified by CG – section 7(2) of ST
Activities or transaction that will be taxable as ‘supply’ even if no consideration
A supply specified in schedule I, made or agreed to be made without consideration is ‘supply’ for purpose of ST Act – section 7(I)(c) of ST Act.
These transactions will be subject to GST, even if there is no consideration.
Schedule I (Section7) – Activities to be treated as supply even if made without consideration
- Permanent transfer / disposal of business assets where input tax credit has been availed on such assets.
- Supply of goods or services or both between related person, or between distinct persons as specified in section 25, when made in the course or furtherance of business (section 25(4) of ST Act state the establishment of same person with distinct GST Registration Number will be treated as ‘distinct person’.
- Supply of goods – (a) By a principal to his agent where the agent undertakes to supply such goods on behalf of the principal or, (b) By an agent to his principal where the agent undertakes to receive such goods on behalf of the principal.
- Import of services by a person from a related person or from any of his other establishment outside India, in the course or furtherance of business.
Payment of GST directly through ISD is required if supply of services to own branch or division with distinct GSTIN w.e.f 1-4-2025
Cross charge means charge of services supplied by HO to branches or branches to HO or another branch.
Payment of GST was not required upto 1-4-2025 if supply of services to own branch or division with distinct GSTIN, or in case of import services, if full ITC available to branch
On the basis of clause 2 of schedule I to ST Act, e-supply of services by one branch/division to another will be subject to GST if there are distinct GST Registration Number.
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