Determining Place of Supply under GST

By R Sahana, Associate, Lakshmikumaran & Sridharan, Chennai

INDIA's journey towards the revolutionary Goods and Service Tax (GST) regime has been a
long and tedious one. However, the past few days has witnessed some of the first steps in
the right direction. With the passing of the 122 nd Constitution Amendment Bill, 2014 both
by the LokSabha as well as the RajyaSabha early this month, the Goods and Service Tax
(GST) regime seems almost impending. 14th June 2016 witnessed the release of the Draft
Model GST Law by the Government of India which aims at rationalizing the current indirect
tax regime by eliminating the looming issue of 'Cascading effect' with the introduction of a
'single tax'. The Model GST Law continues to be deliberated long and wide and a specific
area that requires special focus is the 'Place of Supply of Goods and Services'.
The GST scheme is proposed to be a 'Destination based Consumption Tax' which
simply put is a tax at the point of consumption. The law is structured to support
the levy of Central Goods and Services Tax (CGST) and a State Goods and Services
Tax (SGST) on all supplies effected within a state i.e. intra-state supply. It also provides for
an Integrated Goods and Services Tax (IGST) on supplies effected across two or more states
i.e. inter-state supply. Inter-state supply has been deemed to also include import and
export of goods and services into and out of the country respectively. With this structure in
mind, the determination of place of supply is exceedingly vital to both the taxpayer as well
as the government. For the taxpayer it is vital to determine the nature of the supply i.e.
whether it is an inter-state supply, intra-state supply, export or import. The determination of
the same is important in order to avoid the wrongful payment of a tax towards a supply that
attracts a completely different tax, for instance, the payment of IGST towards an intra-state
supply that would otherwise attract CGST and SGST. At the same time, it is equally
important for the government to determine the nature of supply in order to distinguish the
state to which the state component of GST should accrue.
The principles for determining the supply of goods and/or services in the course of inter and
intra state trade or commerce has been laid down in Section 3 and 3A of Model IGST Act,
2016. It explains that supply in the course of inter-state trade or commerce means a supply
where the location of the supplier and the place of supply are in different states and supply
in the course of intra-state trade or commerce is any supply where the location of the
supplier and the place of supply are in the same state. The provisions also provide that such
inter and intra state supply shall be subject to the provisions laid down in Section 5 and 6 of
the IGST Act. Section 5 lays down the modus to determine the place of supply of goods
while Section 6 provides for the place of supply of services.
The provisions relating to place of supply of goods and services provides for a general rule
as well as specific rules applicable for certain situations to help determine the place of
supply. Sections 5 and 6 of the IGST Act have been broken down in the following tabular
format for improved understanding.

Place of Supply of Goods (Section 5)

Situation

Place of Supply

Transactions involving movement of Goods

Location at the time

movement of goods
terminates for delivery
to recipient.

Movement of goods not involved

Location of goods at the

time of delivery to
recipient.

When goods are assembled or installed at site

Place of such installation

or assembly

Where the goods are delivered by the supplier to a

Principal place of
recipient or any other person, on the direction of a third business on whom the
person, whether acting as an agent or otherwise, before bill is raised
or during movement of goods (Bill to-ship to Model)

Goods supplied on board a conveyance.

Location at which goods

are taken on board.

The table listed out above explicitly provides for a general rule to determine the place of
supply of goods and also at the same time it provides specific rules to determine the place
of supply in transit movement of goods and goods supplied in accordance to the Billto/Ship-to model. The law also provides that in case a supply does not get covered by any
of the above discussed situations making it impossible to determine the place of supply,
then the same will be determined by law made by the parliament on the basis of the GST
Councils recommendations.
In case of Supply of services, the law differentiates between B2B supplies and B2C supplies.
In other words, it takes into account services provided to registered taxable persons and as
well as unregistered persons and the need to determine the place of supply in both
circumstances. The same has been done in accordance with the place of supply provisions
already existent under the European Union Law recommended to be followed by the 13 th
Finance Commission in their Report of Task Force on Implementation of GST. At this point it
is important to note that the proposed GST Law in Section 2(64) defines the 'location of
recipient of service' to mean the place of business for which registration has been obtained

or when the supply is received at a place other than the registered place of business then a
fixed establishment elsewhere will be the location or where the supply is received in more
than one establishment then the location most directly concerned with the supply and in
absence of any of the above, the location of usual place of residence of the recipient.

Place of Supply of Service (Section 6)

Situation

Place of Supply
(B2B)

Place of Supply (B2C)

General Rule

Location of
registered service
recipient.

Location of the recipient

where the address on
record exists, and
location of the supplier
of services in other
cases.

Supply of services in relation to

immovable property

Location at which
the immovable
property is located
or intended to be
located.

Location at which the

immovable property is
located or intended to
be located.

Supply of Restaurant and Catering Location where

Location where services
Services, personal grooming,
services are actually are actually performed.
fitness, beauty treatment, health
performed.
service including cosmetic and
plastic surgery.

Supply of Services in relation to

Location of
training and performance appraisal registered service
recipient.

Location where services

are actually performed.

Supply of services relating to

Location where
admission to a cultural, artistic,
event is actually
sporting, scientific, educational, or held or where the
entertainment event or
park or such other
amusement park or any other
place is situated.
place and ancillary services

Location where event is

actually held or where
the park or such other
place is situated.

Supply of service of organization

Location of
of cultural, artistic, sporting,
registered service
scientific, educational, or
recipient.
entertainment events and services
ancillary to such event
organization.

Location where event is

held.

Supply of Service by way of

transportation of goods, including
mail or courier.

Location of
registered service
recipient.

Location at which goods

are handed over for
their transportation.

Supply of Passenger
transportation service

Location of
registered service
recipient.

Location where the

passenger embarks on
the conveyance for a
continuous journey.

Supply of services on board a

conveyance

Location of the first

scheduled point of
departure.

Location of the first

scheduled point of
departure.

Supply of Telecommunication
Services

1) Fixed line, leased

circuits, cable or
dish antenna
Location where the
circuit, cable or
antenna is installed.

1) Fixed line, leased

circuits, cable or dish
antenna Location
where the circuit, cable
or antenna is installed.

2) Mobile
Connection (Postpaid) Location of
billing address of
service recipient on
record.

2) Mobile Connection
(Post-paid) Location of
billing address of service
recipient on record.
3) Mobile Connection
(Pre-paid- Vouchers)Location where prepayment is received or
vouchers sold.

3) Mobile
Connection (Prepaid- Vouchers)Location where pre- 4) Mobile Connection
payment is received (Pre-paid- Internet
or vouchers sold.
Banking)- Location of
the service recipient on
4) Mobile
record of the supplier.
Connection (Pre-

paid- Internet
Banking)- Location
of the service
recipient on record
of the supplier.

Supply of Banking and other

financial Services

Location of service
recipient on record
of service supplier.

Location of supplier of
services.

Supply of Insurance services

Location of
registered service
recipient.

Location of recipient of
services on the records
of supplier.

Supply of advertisement services

to Central Government, State
Government, statutory body, or a
local authority meant for
identifiable states.

Location shall be the Location shall be the

recipient states.
recipient states.

The analysis of the above discussed provisions makes it abundantly clear that the proposed
GST law covers the place of provision of supply in an extensive manner. However, there are
several question marks yet to be countered. Any business would have numerous segments
with varied activities and the determination of the place of supply for all these varied
undertakings is a multifaceted process. Practical scenarios would give rise to numerous
complex transactions that are difficult to categorize under the above mentioned place of
supply provisions. Provision of services by multiple establishments of a business entity
across the country would face numerous uncertainties in determining the place of supply.
For instance, the place of provision of supply where a service is supplied from a supplier in
Mumbai to a recipient in Delhi for actual use in Bangalore would be Delhi according to the
IGST Act. Ideally, the location should be Bangalore keeping in mind that the GST Law is
based on the foundation of destination based consumption tax. Transactions of this kind
have a bearing on the very foundation of the proposed law.
Further, the proposed GST Law in Section 2(65) defines the 'location of supplier of service'
to mean a supply made from a place of business for which registration has been obtained. It
also provides that in case the supply is made from a place other than the registered place of
business, the fixed establishment from where the service is rendered will be the location of
supplier of service. However, there could be instances where services are rendered partly by
the registered place of business and partly by a fixed establishment located elsewhere. In
order to counter such a situation, the 13 th Finance Commission recommended the
employment of the 'Predominant use test' to determine the principal location from which the
service is rendered. The proposed law has also provided for the same in Section 2(65)(iii).
No doubt that this method is neither as straightforward as it is made to seem.

Thus, there is no question in the fact that provisions relating to place of supply require
several clarifications and the onus is now upon the industries to review their transactions to
ensure adequate coverage by the provisions of the law and support of the government in
clearing the clouds of doubt.

Services: Taxable event and point of taxation under GST regime

SEPTEMBER 08, 2016
By R N Jha
SERVICE TAX, starting its journey from the year 1994 as an independent stream of Central
indirect tax, will change its course of flow under GST regime (when it will be subsumed in
'Goods and Service Tax'). For "Services", the GST will retain the components of taxability'Taxable Event' & 'Point of Taxation' with different concept & approach. The tributary will not
lose its identity & character even after being submerged into the main-stream!
For better understanding of the concept of 'Taxable Event' & 'Point of Taxation' in
respect of SERVICES , the comparative analysis (under the present system of
indirect taxation & under GST regime) has been done and is given in tabulated
form below:
Service
Tax:
Present
system of
taxation

Taxable Event -Service provided or agreed to be provided/

rendering services or agreement to render services.
Point of Taxation : As per the provisions of Point of Taxation Rules,
2011
Rule 2(e): "point of taxation" means the point in time when a service
shall be deemed to have been provided.
[Refer Section 66B of Finance Act , 1994 ; Point of Taxation
Rules,2011]

GST
REGIME

Taxable Event : Supply of services

Point of Taxation : Time of Supply of services
Services defined in the GST Model law:
2(88) "services" means anything other than goods;
Explanation: Services include intangible property and actionable
claim but does not include money.
Supply of services: Section 3 of the Model GST Law provides the

meaning and scope of supply of services:

3(1)
Supply includes
(a) all forms of supply of goods and/or services 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,

(b) importation of service, whether or not for a

consideration and whether or not in the course or
furtherance of business, and

(c) a supply specified in Schedule I, made or agreed to

be made without a consideration.
SCHEDULE I
MATTERS TO BE TREATED AS SUPPLY WITHOUT
CONSIDERATION
1. Permanent transfer/disposal of business assets.
2. Temporary application of business assets to a
private or non-business use.
3. Services put to a private or non-business use.
4. Assets retained after deregistration.
5. Supply of goods and / or services by a taxable
person to another taxable or nontaxable person in the
course or furtherance of business.

3(2)

Schedule II, in respect of matters mentioned therein,

shall apply for determining what is, or is to be treated
as a supply of goods or a supply of services.
SCHEDULE-II

MATTERS TO BE TREATED AS SUPPLY OF

SERVICES
Description of service
Schedule
II
Sr. No
1(2)
Transfer
Any transfer of goods or of right in goods
or of undivided share in goods without the
transfer of title thereof, is a supply of
services.

2(1)

Land and Building

Any lease, tenancy, easement, licence to
occupy land is a supply of services.

2(2)
Land and Building
Any lease or letting out of the building
including a commercial, industrial or
residential complex for business or
commerce, either wholly or partly, is a
supply of services.
3
Treatment or process
Any treatment or process which is being
applied to another person's goods is a
supply of services.
4(2)
Transfer of business assets
Where, by or under the direction of a
person carrying on a business, goods held
or used for the purposes of the business

are put to any private use or are used, or

made available to any person for use, for
any purpose other than a purpose of the
business, whether or not for a
consideration, the usage or making
available of such goods is a supply of
services.

4(3)

Transfer of business assets

Where any goods, forming part of the
business assets of a taxable person, are
sold by any other person who has the
power to do so to recover any debt owed
by the taxable person, the goods shall be
deemed to be supplied by the taxable
person in the course or furtherance of his
business.

5(a)

Renting of immovable property

It is a Declared Service under Finance
Act, 1994 (Refer Section 66E(a) of
FINANCE ACT,1994).

5(b)
Construction of a complex, building,
civil structure or a part thereof ,
including a complex or building intended for
sale to a buyer, wholly or partly, except
where the entire consideration has been
received after issuance of completion
certificate, where required, by the
competent authority or before its first
occupation, whichever is earlier.
Explanation.- For the purposes of this
clause(1) the expression "competent authority"
means the Government or any authority
authorized to issue completion certificate
under any law for the time being in force
and in case of non-requirement of such
certificate from such authority, from any of
the following, namely:
(i) an architect registered with the Council

of Architecture constituted under the

Architects Act, 1972; or
(ii) a chartered engineer registered with
the Institution of Engineers (India); or
(iii) a licensed surveyor of the respective
local body of the city or town or village or
development or planning authority;
(2) the expression "construction" includes
additions, alterations, replacements or
remodeling of any existing civil structure;
It is Declared Service under Finance
Act, 1994.
Almost similar provisions have been
retained :
Construction of a complex, building, civil
structure or a part thereof, including a
complex or building intended for sale to a
buyer, wholly or partly, except where the
entire consideration is received after
issuance of completion- certificate by the
competent authority.
(Refer Section 66E(b) of FINANCE
ACT,1994).
5(c)

Temporary transfer or permitting the use or

enjoyment of any intellectual property
right;
It is Declared Service under Finance
Act, 1994 ( Refer Section 66E(c) of
FINANCE ACT,1994).

5(d)

Development, design, programming,

customisation, adaptation, upgradation,
enhancement, implementation of
information technology software;
It is Declared Service under Finance
Act, 1994 ( Refer Section 66E(d) of
FINANCE ACT,1994).

5(e)

Agreeing to the obligation to refrain from

an act, or to tolerate an act or a situation,
or to do an act;

It is Declared Service under Finance

Act, 1994 ( Refer Section 66E(e) of
FINANCE ACT,1994).
5(f)
Works contract including transfer of
property in goods (whether as goods or in
some other form) involved in the execution
of a works contract;
2(107) "works contract" means an
agreement for carrying out for cash,
deferred payment or other valuable
consideration, building, construction,
fabrication, erection, installation, fitting
out, improvement, modification, repair,
renovation or commissioning of any
moveable or immovable property;

It is Declared Service under Finance

Act, 1994
Section 66E(h) : service portion in the
execution of a works contract.
Section 65B(54) "works contract" means
a contract wherein transfer of property in
goods involved in the execution of such
contract is leviable to tax as sale of goods
and such contract is for the purpose of
carrying out construction, erection,
commissioning, installation, completion,
fitting out, repair, maintenance, renovation,
alteration of any movable or immovable
property or for carrying out any other
similar activity or a part thereof in relation
to such property;
5(g)

Transfer of the right to use any goods for

any purpose (whether or not for a specified
period) for cash, deferred payment or other
valuable consideration; and
It is Declared Service under Finance
Act, 1994
Section 66E(f): transfer of goods by way
of hiring, leasing, licensing or in any such

manner without transfer of right to use

such goods;
Section 66E(g): activities in relation to
delivery of goods on hire purchase or any
system of payment by instalments;
5(h)

Supply, by way of or as part of any service

or in any other manner whatsoever, of
goods, being food or any other article for
human consumption or any drink (other
than alcoholic liquor for human
consumption), where such supply or
service is for cash, deferred payment or
other valuable consideration.
It is Declared Service under Finance
Act, 1994
Section 66E(i): service portion in an
activity wherein goods, being food or any
other article of human consumption or any
drink (whether or not intoxicating) is
supplied in any manner as a part of the
activity .

3(2A)
Where a person acting as an agent who, for an agreed
commission or brokerage, either supplies or receives
any goods and/or services on behalf of any principal,
the transaction between such principal and agent shall
be deemed to be a supply.
3(3)
Subject to sub-section (2), the Central or a State
Government may, upon recommendation of the
Council, specify, by notification, the transactions that
are to be treated as(i) a supply of goods and not as a supply of services;
or
(ii) a supply of services and not as a supply of goods;
or

(iii) neither a supply of goods nor a supply of services.

TIME OF SUPPLY OF SERVICES

Defined in Section 2(102) of Model GST Law.
2(102) "time of supply of services" shall have the meaning as
assigned to it in section 13.

Before Concluding:
From the above comparative analysis, it is seen that almost the major provisions of the
'Point of Taxation Rules, 2011' have been retained in of the Model GST Law (Section 13)
However, the provisions shown in TABLE VI[ Rule 5, 8, 8A and Rule 7(2 nd proviso to Rule
7:service provided to 'associated enterprises'] have not been incorporated. In my opinion,
these provisions should also be added so as to avoid any confusion or ambiguity of law in
respect of time of supply of services.
See : Goods: Taxable event and point of taxation under GST regime
(DISCLAIMER : The views expressed are strictly of the author and Taxindiaonline.com doesn't
necessarily subscribe to the same. Taxindiaonline.com Pvt. Ltd. is not responsible or liable for any loss
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S GST will be applicable on 'supply of goods and/or services', the existing concept of taxable
events such as 'manufacture', 'provision of services' 'sale' etc. will lose their relevance.
Further, there will be a sea change in the concept of "point of taxation" under the GST
regime.
For better understanding of the concept of 'Taxable Event' & 'Point of Taxation' in respect
of GOODS' the comparative analysis (under the present system of indirect taxation & under
GST regime) has been done and is given in tabulated form below:
(*The above concept in respect of SERVICES will be analyzed in PART-II of the Article)
Taxable Event & Point of Taxation
Present
system of
taxation
Central
Excise

Taxable event: Manufacture

Point of Taxation: Time of clearance of the goods
The taxable event is the manufacture of the goods but the
excise duty is paid at the time of clearance of goods.
Charging section is Section 3 of the Central Excise Act,
1944. The collection of the duty is regulated by the Rules
made under the Act i.e. Rule 4, 5 & 8 of Central Excise
Rules, 2002 for determination of manner of payment of
excise duty.

Customs
Taxable event: Import of goods[ Section 2(23) of Customs
Act, 1962]

Date of determination of rate of duty

date on which a bill of entry is presented under section
46 (in the case of goods entered for home consumption)
date of entry inwards in the case of prior bill of entry (bill
of entry presented before the date of entry inwards of the
vessel or the arrival of the aircraft or the vehicle)
date on which a bill of entry for home consumptionis
presented (in the case of goods cleared from a warehouse
under section 68)];
-in the case of any other goods, on the date of payment
of duty.
[Refer Section 12 & Section 15 of Customs Act, 1962.
The provisions of section 15 is not applicable to baggage
and goods imported by post.
Service
Tax

*Taxable Event-Service provided or agreed to be provided/

rendering services or agreement to render services.
Point of Taxation: Date of invoice or Date of payment,
whichever is earlier(General Rule-Rule 3 of Point of Taxation
Rules, 2011)
[Refer Section 66B of Finance Act' 1994; Point of
Taxation Rules,2011]
* The present discussion is in respect of GOODS, Service
tax (being the component of indirect tax system) is
mentioned for the sake of convenience only.

State
Vat/CST

Taxable event: Sale or purchase of goods.

Point of Taxation: Time of sale / time of transfer of title or
possession of goods.

Definition of SALE:
Central Excise Act, 1944
Section 2(h) : "sale" and "purchase", with their

grammatical variations and cognate expressions, mean any

transfer of the possession of goods by one person to
another in the ordinary course of trade or business for cash
or deferred payment or other valuable consideration.
Karnataka Value Added Tax Act, 2003
2(29) "Sale" with all its grammatical variation and cognate
expressions means every transfer of the property in goods
(other than by way of a mortgage, hypothecation, charge or
pledge) by one person to another in the course of trade or
business for cash or for deferred payment or other valuable
consideration and includes,(a) A transfer otherwise than in pursuance of a contract of
property in any goods for cash, deferred payment or other
valuable consideration;
(b) A transfer of property in goods (whether as goods or in
some other form) involved in the execution of a works
contract;
(c) A delivery of goods on hire purchase or any system of
payment by installments;
(d) A transfer of the right to use any goods for any purpose
(whether or not for a specified period) for cash, deferred
payment or other valuable consideration.
GUJARAT VALUE ADDED TAX ACT, 2003
2(23) "Sale" means a sale of goods made within the State
for cash or deferred payment or other valuable
consideration and includes,(a) transfer, otherwise than in pursuance of a contract, of
property in goods for cash, deferred payment or other
valuable consideration,
(b) transfer of property in goods (whether as goods or in
some other form) involved in execution of a works contract,
(c) delivery of goods on hire purchase or any system of
payment by installments,
(d) transfer of the right to use any goods for any purpose
(whether or not for a specified period) for cash, deferred
payment or other valuable consideration,

(e) supply of goods by any unincorporated association or

body of persons to a member thereof for cash, deferred
payment or other valuable consideration,
(f) supply of goods by a society or club or an association to
its members on payment of a price or of fees or subscription
or any consideration,
(g) supply of goods by way of or as part of any service or in
any other manner whatsoever, of
(h) supply of goods being food or any other article for
human consumption or any drink (whether or not
intoxicating) where such supply or service is for cash,
deferred payment or other valuable consideration,
(i) supply by way of barter of goods,
(j) disposal of goods by a person but does not include a
mortgage, hypothecation, charge or pledge; and the words
"sell", "buy" and "purchase" with all their grammatical
variations and cognate expressions shall be construed
accordingly.

Definition of GOODS:
Sale of Goods Act, 1930
2(7) "goods" means every kind of moveable property other
than actionable claims and money; and includes stock and
shares, growing crops, grass, and things attached to or
forming part of the land which are agreed to be severed
before sale or under the contract of sale;
Karnataka Value Added Tax Act, 2003
2(15) "Goods" means all kinds of movable property (other
than newspaper, actionable claims, stocks and shares and
securities) and includes livestock, all materials, commodities
and articles (including goods, as goods or in some other
form) involved in the execution of a works contract or those
goods to be used in the fitting out, improvement or repair of
movable property, and all growing crops, grass or things
attached to, or forming part of the land which are agreed to
be severed before sale or under the contract of sale.

GUJARAT VALUE ADDED TAX ACT, 2003.

2(13) "Goods" means all kinds of movable property (other
than newspapers, actionable claims, electricity, stocks and
shares and securities) and includes live stocks, all materials,
articles and commodities and every kind of property
(whether as goods or in some other form) involved in the
execution of works contract, all intangible commodities and
growing crops, grass, standing timber or things attached to
or forming part of the land, which are agreed to be severed
before sales or under the contract of sale;

TIME OF SUPPLY DEFINED:

Karnataka Value Added Tax Act, 2003
7. Time of sale of goods :
(1) Notwithstanding anything contained in the Sale of Goods
Act, 1930 (Central Act 3 of 1930), for the purpose of this
Act, and subject to subsection (2), the sale of goods shall
be deemed to have taken place at the time of transfer of
title or possession or incorporation of the goods in the
course of execution of any works contract whether or not
there is receipt of payment:
Provided that where a dealer issues a tax invoice in respect
of such sale within fourteen days from the date of the sale,
the sale shall be deemed to have taken place at the time
the invoice is issued.
(2) Where, before the time applicable in sub-section (1), the
dealer selling the goods issues a tax invoice in respect of
such sale or receives payment in respect of such sale, the
sale shall, to the extent that it is covered by the invoice or
payment, be deemed to have taken at the time the invoice
is issued or the payment is received.
(3) The Commissioner may on an application of any dealer
exempt such dealer subject to such conditions as he may
specify, from the time specified in sub- section (1).

ASSAM VALUE ADDED TAX ACT 2003

18. Timeof sale of goods:

(1) Notwithstanding anything contained in the Sale of Goods

Act, 1930, for the purpose of this Act, the time of sale of
goods shall be deemed to be the earliest of the following,(a) Issue of the tax invoice;
(b) Receipt of payment, in full or in part;
(c) Transfer of title or possession of the goods or
incorporation of the goods in the course of execution of any
works contract.
GST
REGIME

GST (GST
Model
Taxable Event : Supply of goods
law)
Point of Taxation : Time of Supply of goods.
Goods defined in the GST Model law:
2(48) "goods'' means every kind of movable property other
than actionable claim and money but includes securities,
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;
Explanation. For the purpose of this clause, the term
'moveable property' shall not include any intangible
property.
Supply
Section 3 of the Model GST Act provides the meaning and
scope of supply of goods::
3(1)
Supply includes
(a) all forms of supply of goods and/or
services 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,
(b) importation of service, whether or not
for a consideration and whether or not in
the course or furtherance of business, and

(c) a supply specified in Schedule I, made

or agreed to be made without a
consideration.
SCHEDULE I
MATTERS TO BE TREATED AS SUPPLY
WITHOUT CONSIDERATION
1. Permanent transfer/disposal of
business assets.
2. Temporary application of business
assets to a private or non-business use.
3. Services put to a private or nonbusiness use.
4. Assets retained after deregistration.
5. Supply of goods and / or services by a
taxable person to another taxable or
nontaxable person in the course or
furtherance of business.
Provided that the supply of goods by a
registered taxable person to a job-worker
in terms of section 43A shall not be
treated as supply of goods.
3(2)
Schedule II, in respect of matters
mentioned therein, shallapply for
determining what is, or is to be treated as
a supply of goods or a supply of services.
SCHEDULE II
MATTERS TO BE TREATED AS SUPPLY
OF GOODS
Description of service
Schedule
II
Sr. No

1(1)
Transfer
Any transfer of the title in goods is a
supply of goods.
1(3)
Transfer
Any transfer of title in goods under an
agreement which stipulates that property
in goods will pass at a future date upon
payment of full consideration as agreed, is
a supply of goods.
4(1)
Transfer of business assets
Where goods forming part of the assets of
a business are transferred or disposed of
by or under the directions of the person
carrying on the business so as no longer
to form part of those assets, whether or
not for a consideration, such transfer or
disposal is a supply of goods by the
person.
4(3)
Transfer of business assets
Where any goods, forming part of the
business assets of a taxable person, are
sold by any other person who has the
power to do so to recover any debt owed
by the taxable person, the goods shall be
deemed to be supplied by the taxable
person in the course or furtherance of his
business.
6(a)

supply of goods by any unincorporated

association or body of persons to a
member thereof for cash, deferred
payment or other valuable consideration,
shall be treated as supply of goods.

3(2A)

Where a person acting as an agent who,

for an agreed commission or brokerage,
either supplies or receives any goods

and/or services on behalf of any principal,

the transaction between such principal
and agent shall be deemed to be a supply.
3(3)
Subject to sub-section (2), the Central or
a State Government may, upon
recommendation of the Council, specify,
by notification, the transactions that are
to be treated as (i) a supply of goods and not as a supply
of services; or
(ii) a supply of services and not as a
supply of goods; or
(iii) neither a supply of goods nor a supply
of services.

TIME OF SUPPLY OF GOODS

Defined in Section 2(101) of Model GST Law.
2(101) "time of supply of goods'' shall have the meaning
as assigned to it in section 12.
Section 12: It is being tabulated below:

Section SUPPLY OF GOODS AND TIME OF SUPPLY

12(2)
Removal of goods/goods made available:

Explanation 1.- The provisions of Section 12(2)(a)(ii) shall apply in cases

where the goods
(a) are physically not capable of being moved; or
(b) are supplied in assembled or installed form; or
(c) are supplied by the supplier to his agent or his principal.
Explanation 2.- For the purposes of Section 12(2)(a)(ii), the expression
'made available to the recipient' shall mean when the goods are placed
at the disposal of the recipient.
Explanation 3.- For the purposes of clauses (b) and (c) of sub-section (2)
of Section 12, the supply shall be deemed to have been made to the
extent it is covered by the invoice or, as the case may be, the payment.
Explanation 4.- For the purpose of clause (c) of sub-section (2) of
Section 12, "the date on which the supplier receives the payment shall
be the date on which the payment is entered in his books of accounts or
the date on which the payment is credited to his bank account,

whichever is earlier.
12(3)

Continuous supply of goods:

Section 12(4 ): For the purposes of sub section (3) above, the Central
or a State Government may, on the recommendation of the Council,
specify, by notification, the supply of goods that shall be treated as
continuous supply of goods;

Section 2(30) " continuous supply of goods" means a supply of goods

which is provided, or agreed to be provided, continuously or on
recurrent basis, under a contract, whether or not by means of a wire,
cable, pipeline or other conduit, and for which the supplier invoices the
recipient on a regular or periodic basis.
12(5)
Tax payable under REVERSE CHARGE

Explanation.- For the purpose of clause (b) of sub-section (5), "the date
on which the payment is made" shall be the date on which the payment
is entered in the books of accounts of the recipient or the date on which
the payment is debited in his bank account, whichever is earlier.
12(6)
If the goods (being sent or taken on approval or sale or return or similar
terms) are removed before it is known whether a supply will take place:

12(7)

In case it is not possible to determine the time of supply under the

provisions of subsection (2), (3), (5) or (6).