CGST §7 — Scope of supply

GST is levied on every 'supply' — meaning sale, transfer, barter, exchange, licence, rental, lease or disposal made for a consideration in the course / furtherance of business. Schedule I lists supplies WITHOUT consideration still treated as supply (gifts to related party > ₹50,000, import of service from related party for business).

Key points

• §7 of the CGST Act defines 'supply' as the trigger event for GST liability.
• SUPPLY INCLUDES: (a) all forms of supply of goods or services — 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;
• (b) import of services for a consideration whether or not in the course / furtherance of business;
• (c) activities in Schedule I made WITHOUT consideration: (i) permanent transfer of business assets on which ITC was availed, (ii) supply between RELATED PERSONS or DISTINCT PERSONS (different GST registrations of same PAN) when made in course / furtherance of business — EXCEPT gifts up to ₹50,000 per FY by employer to employee;
• (iii) supply of goods by principal to agent or vice versa where agent supplies in own name;
• (iv) import of services by a taxable person from related person or own establishment outside India in course / furtherance of business.
• ACTIVITIES TREATED AS NEITHER GOODS NOR SERVICES (Schedule III): services by employee to employer, services by court / tribunal, function of MP / MLA, services of funeral / burial / crematorium, sale of land + completed building, actionable claims other than lottery / betting / gambling.

Reference: §7 CGST Act 2017 read with Schedule I and Schedule III