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1. Proposed taxable event – ‘supply’
Any event or transaction or occurrence that results in a tax consequence / liability can be said to be a taxable event. Under the current Indian indirect tax regime such event /transaction /occurrence include manufacturing, sale, provision of service, import of goods into India, export of goods from India, entry of goods into a specified area for sale /use / consumption, admission to an entertainment etc. Under the proposed Indian Goods and Services Tax (GST) regime majority of these taxable events would be subsumed into a single taxable event – “supply”. The GST Constitution Amendment Bill1 defines2 GST as – “goods and services tax means any tax on supply of goods, or services or both except taxes on supply of the alcoholic liquor for human consumption”. The term ‘supply’ has not been defined therein.
2. ‘Supply’, a taxable event under different jurisdictions
Under the Directive3 issued by the Council of the European Union, the ‘chargeable event’ is defined as – “chargeable event shall mean the occurrence by virtue of which the legal conditions necessary for VAT to become chargeable are fulfilled”. Under the Directives, “the chargeable event shall occur and VAT shall become chargeable when the goods or the services are supplied”. Following are further defined –
– ‘Supply of goods’ shall mean the transfer of the right to dispose of tangible property as owner.
– ‘Supply of services’ shall mean any transaction which does not constitute a supply of goods.
In Canada, for levy of Goods and Services Tax4, ‘taxable supply means a supply that is made in the course of a commercial activity’. Further, ‘supply means, subject to sections 133 and 134, the provision of property or a service in any manner, including sale, transfer, barter, exchange, licence, rental, lease, gift or disposition’.
In United Kingdom, scope of Valued Added Tax is specified5 as – (1) VAT shall be charged on any supply of goods or services made in the United Kingdom, where it is a taxable supply made by a taxable person in the course or furtherance of any business carried on by him. (2)A taxable supply is a supply of goods or services made in the United Kingdom other than an exempt supply. In turn, ‘supply is defined as “supply” in this Act includes all forms of supply, but not anything done otherwise than for a consideration. Further, anything which is not a supply of goods but is done for a consideration (including, if so done, the granting, assignment or surrender of any right) is a supply of services.
In Singapore, for levy of Goods and Services Tax6, ‘A taxable supply is a supply of goods or services made in Singapore other than an exempt supply’.. In turn, ‘supply is defined as “supply” in this Act includes all forms of supply, but not anything done otherwise than for a consideration. Further, anything which is not a supply of goods but is done for a consideration (including, if so done, the granting, assignment or surrender of any right) is a supply of services.
In Malaysia, for levy of Goods and Services Tax7 , ‘supply means all forms of supply, including supply of imported services, done for a consideration and anything which is not a supply of goods but is done for a consideration is a supply of services’.
In Australia, ‘taxable supplies’8 is defined as follows:
You make a taxable supply if:
(a) youmake the supplyfor consideration; and
(b) the supply is made in the course or furtherance of an enterprise that you carry on; and
(c) the supply is connected with the indirect tax zone; and
(d) you are registered, or required to be registered.
However, the supply is not a taxable supply to the extent that it is GST free or input taxed.
Meaning of supply , in turn, in Australia, is as follows:
(1) A supply is any form of supply whatsoever.
(2) Without limiting subsection (1), supply includes any of these:
(a) a supply of goods;
(b) a supply of services;
(c) a provision of advice or information;
(d) a grant, assignment or surrender of real property;
(e) a creation, grant, transfer, assignment or surrender of any right;
(f) a financial supply;
(g) an entry into, or release from, an obligation:
(i) to do anything; or
(ii) to refrain from an act; or
(iii) to tolerate an act or situation;
(h) any combination of any 2 or more of the matters referred to in paragraphs (a) to (g).
(3) It does not matter whether it is lawful to do, to refrain from doing or to tolerate the act or situation constituting the supply.
(3A) For the avoidance of doubt, the delivery of:
(a) livestock for slaughtering or processing into food; or
(b) game for processing into food;
under an arrangement under which the entity making the delivery only relinquishes title after food has been produced, is the supply of the livestock or game (regardless of when the entity relinquishes title). The supply does not take place on or after the subsequent relinquishment of title.
(4) However, a supply does not include a supply of money unless the money is provided as consideration for a supply that is a supply of money.
In majority of these jurisdictions, the term ‘supply’ has been stated to be – ‘supply’ in all forms or in any form or in any manner.
3. Meaning of the term ‘supply’
The word “supply” is defined in the Standard Dictionary as ‘that which is or can be supplied; available aggregate of things needed or demanded; an amount sufficient for a given use or purpose”. In the Imperial Dictionary, ‘that which is supplied; sufficiency of things for use or want; a quantity of something furnished or on hand”10.
Apex Court while dealing11 with the words ‘duty on supply of electricity’ employed in charging section 3 of the Kerala Electricity Surcharge (Levy and Collection) Act, 1989, in light of Entry 53 of State List of Seventh Schedule to the Constitution of India viz., ‘Taxes on the consumption or sale of electricity’; held that the word `supply’ used in the charging section 3 should, receive liberal interpretation to include sale or consumption of electricity as envisaged in Entry 53 of the State List.
From the sub-station, electricity is connected to the industrial units through the meter put up in the factory. Continuity of supply and consumption starts from the moment the electrical energy passes through the meters and sale simultaneously takes place as soon as meter reading is recorded. It is true that from the place of generating electricity, the electricity is supplied to the sub-station installed at the units of the consumers through electrical hightension transformers and from there electricity is supplied to the meter. But the moment electricity is supplied through the meter, consumption and sale simultaneously take place. It is true that in the definitions given in the New Encyclopaedia Britanica, Vol. 4, p.842 cited before us, distinction between supply and consumption is stated but adopting a pragmatic and realistic approach, we are of the considered view that as soon as the electrical energy is supplied to the consumers and is transmitted through the meter, consumption takes place simultaneously with the supply.
Under Section 9A of the Representation of the People Act, 1951, a person is disqualified if, and for so long as, there subsists a contract entered into by him in the course of his trade or business with the appropriate Government for the supply of goods to, or for the execution of any works undertaken by that Government. The Orissa High Court, held12 that in the context of its use in the provision, the word ‘supply’ has to be construed as a form of sale and despatch.
The word “supply” means “to give”, or “to provide or to afford something that is necessary”. In the context of its use in the provision, it has to be construed as a form of sale and despatch. The conception of supply of goods must be interpreted in the conception of sale. For the purpose of Section 9A, there can be no supply of goods unless there is a sale to the State. As observed in West Survey Water Co. vs. Chertsey, (1894) 3 Ch 519: “To ‘supply’ anything –e.g., water — means passing it from one who has it to those who want it; you may ‘provide’ a thing for yourself, but that is not ‘supplying it’”.
In the context of definition of ‘supply’ in Australia, it has been clarified13 that –
The words ‘A supply is any form of supply whatsoever’ in s/s. 9-10(1) cover all supplies regardless of whether they concern goods or services. This is defined broadly and is intended to encompass supplies as widely as possible. The intended scope of s/s. 9-10(1) is more fully illustrated in s/s. 9-10(2), which provides a list of things that are included as supplies. It is not an exhaustive list. It does not limit the possible breadth of the definition of supply in s/s. 9-10(1).Something that is not listed in s/s. 9-10(2) but falls within s/s. 9-10(1) will be a supply.
For the purpose of GST / VAT , the word ‘supply’ is not only likely to be defined broadly but would encompass supplies as widely as possible. It appears that the word ‘supply’ for a tax consequence would not have a restrictive meaning.
4. “Supply” – meaning as assigned in Indian Model GST Law14
It, prima facie, appears that the Model GST Law has not been reviewed by the legal eye of draftsmen. Assuming this, the observations discussed herein are on conceptual basis only.
The term ‘supply’ has been assigned meaning in section 3 of the Model GST Law as: “3. Meaning and scope of supply
(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.
(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.
(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) Subject to s/s. (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.
(4) Notwithstanding anything contained in s/s. (1), the supply of any branded service by an aggregator, as defined in section 43B, under a brand name or trade name owned by him shall be deemed to be a supply of the said service by the said aggregator.”
In a UK case, of British Airways15, it had an arrangement where food outlets provided food to passengers of delayed flights. When there was a flight delay, an announcement was made to passengers that vouchers of a specified amount were available for passengers’ use at food outlets. Passengers could use their boarding pass when a voucher was not available. For British Airways to succeed in claiming input tax credit for the VAT included in the charge to it for the refreshments provided to delayed passengers there must have been a ‘supply’ of something by the outlets to British Airways. The issue was did British Airways obtain ‘anything – anything at all?’ The VAT Tribunal held that – Yes, British Airways obtained the right to have its delayed passengers fed at its expense – and that was clearly for the purpose of its business. The Tribunal held that there was a supply of services made to British Airways. British Airways had earlier also disputed the VAT treatment of this arrangement. Earlier British Airways had argued there was a supply of goods rather than services to it. The definition of supply of goods under the UK VAT Law required a transfer of dispositive power. As British Airways never had dispositive power over the supply of food, it was earlier held that a supply of goods had not been made to British Airways.
For every supply there ought to be a ‘supplier’ and a ‘recipient’. The terms ‘supplier’ and ‘recipient’ are defined in the Model GST Law. Also, for claiming input tax credit, it would be essential to identify the ‘supplier’, the ‘recipient’, the ‘supply’ made and the nature (goods or services or anything else) of supply.
In the definition, ‘supply includes all forms of supply ….. made….’. The Australian law uses the word ‘make’; in this context it was held16 that GST only applies where the ‘supplier’ makes a voluntary supply and not where a supply occurs without any action by the entity (‘supplier’) had there been a supply.
Only those supplies made for a consideration would be regarded as ‘supply’. Term ‘consideration’ is defined in Model GST Law. A restaurant accepts tips from its customers, including tips on bills paid by credit card. These tips are unsolicited and are in addition to the price stipulated by the restaurant in the bills presented to the customers. The restaurant does not pass these tips on to the restaurant’s employees. The tips are voluntary payments made in connection with the restaurant supplies made by the restaurant to its customers. Although there is no obligation on the customers to make these payments, the question that would arise is should the tips retained by the restaurant form part of the consideration for the restaurant supplies by the restaurant to its customers. If the restaurant passes the tips on to the restaurant’s employees, the payments are not for the restaurant supplies by the restaurant. The tips constitute income of the restaurant employees and would such payments be subject to GST as the employees are not carrying on an enterprise for GST purposes.
The following transactions / occurrences has been / could be evaluated for being treated as ‘supply’ or not:
Penalty
Under the New Zealand GST Act ‘services’ means ‘anything which is not goods or money’. In Case S6517 the Court warned that there are limits to this definition. In this case a costs order was made against a solicitor who was struck off the roll by the New Zealand Law Practitioners Disciplinary Tribunal. The costs order required the solicitor to pay amounts to the New Zealand Law Society and the District Law Society for their costs and expenses relating to the disciplinary proceedings. The Court held that these payments were not consideration for a supply of services by the Law Societies to the solicitor. The Court ruled that the ordinary meaning of the word ‘supply’ limited the breadth of the phrase ‘supply of services’, which was only so wide as to include activities where the provider has done something for, not against, the recipient. To rule otherwise would lead to absurdity because it would allow the concept of a supply to encompass situations where a person sues for recovery of property, or steals something from someone else.
Out-of-court settlement
Matters in dispute may be resolved either by the judgment of a court, or (at a time prior to the court delivering its judgment) by agreement between the parties. Such an agreement between parties is generally referred as an out-of-court settlement. Out-of-court settlements could include any form of dispute resolution in which the terms of the resolution are agreed between the parties, rather than imposed by the court. These terms of the resolution may create supplies for GST purposes, which may be characterised as:
(i) surrendering a right to pursue further legal action; or
(ii) entering into an obligation to refrain from further legal action; or
(iii) releasing another party from further obligations in relation to the dispute.
Financial Assistance / Grant
A Government Agency, say, offers manufacturers a rebate / incentive of an amount when they purchase and install a new machine in their factory. The new machine can be purchased from anywhere. To be eligible for the rebate / incentive the new machine must be installed in new factory and the new machine must meet a specified energy efficiency rating. To obtain the rebate / incentive the manufacturer must submit an application form with copies of their purchase and installation invoices. The manufacturer does not enter into any obligations, other than providing further evidence to support their claim in accordance with the eligibility criteria. The rebate / incentive granted by the Government Agency, in fulfilment of specified conditions and against the application submitted by the manufacturer and the agreement to provide further evidence in support of their claim may be treated as a supply or may not be regarded as a ‘ supply’.
4.2 “Supply” in Indian Model GST Law – Section 3(1)(b)
Import of service, whether or not for a consideration and whether or not in the course or furtherance of business is included in the definition of ‘supply’. An import of services by an individual, not in the course of furtherance of business, would be ‘supply’. The inclusion of supplies not for a consideration raises certain doubts as to what types of transactions are intended to be covered therein, which should be clarified / specified.
In the context of cross-border supplies and the growth of the digital economy where consumption is of a private/ domestic nature, currently, indirect tax / service tax do not apply / is exempted to such supplies made by nonresidents to consumers in India. This treatment causes disadvantage to local suppliers. Sub-section (1)(b) of the Model GST Law will result in supplies of digital products, such as streaming or downloading of movies, music, apps, games, e-books as well as other services such as consultancy and professional services, receiving similar GST treatment whether they are supplied by a local or foreign supplier. However, clarity would be required in respect of such supplies received by non-residents (tourists) when they are temporarily in India.
Action 1 of the Action Plans on Base Erosion and Profit Shifting issued by Organisation for Economic Cooperation and Development (OECD)– ‘Address the tax challenges of the digital economy’ – requires to identify the main difficulties that the digital economy poses for the application of existing international tax rules and develop detailed options to address these difficulties, taking a holistic approach and considering both direct and indirect taxation. Action 1 also requires examination as to how to ensure the effective collection of VAT /GST with respect to the cross-border supply of digital goods and services. It is recognised that non-resident suppliers should register and account for VAT in as many foreign jurisdictions as they have consumers of remotely delivered services. This may impose compliance burdens on these suppliers and countries should therefore consider the use of simplified registration regimes and registration thresholds to minimise the potential compliance burden on businesses.
Australian GST Law is proposed18 to be amended to ensure that digital products and other imported services supplied to Australian consumers by foreign entities are subject to GST in a similar way to equivalent supplies made by Australian entities. It is also proposed that in some circumstances, responsibility for GST liability may be shifted from the supplier to the operator of an electronic distribution platform, where the supply is made through such a platform, and the operator controls any of the key elements of the supply such as price, terms and conditions or delivery arrangements. Under the current Australian GST Law, non-resident suppliers are required to register for GST if their projected or current turnover is greater than the registration turnover threshold.
Norway was the first country to have implemented such mechanism for taxation of e-services / digital services effective from July 2011.
A combined reading of section 4(3) of Model IGST Law read with section 9(3)(c) and Para 5(iii) of Schedule III of the Model CGST/SGST Law suggests that such an individual may be required to register and pay GST. Alternatively, combined reading of section 4(3) of Model IGST Law read with Para 5(iv) of Schedule III of the Model CGST/SGST Law may be interpreted that non-resident taxable person may be required to register and pay GST.
4.3 “Supply” in Indian Model GST Law – Section 3(1)(c)
Certain specified supplies made or agreed to be made without a consideration are included in the definition of ‘supply’. Such supplies specified in Schedule I to Model GST Law, are as follows:
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 non-taxable 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.
In the earlier unofficial draft of Model GST Law released in October 2015, there was an entry – ‘self supply of goods and/or services’, which is not appearing in this Schedule. Entry 5 was not there in the earlier Schedule. One view being propagated is that Entry 5 deals with ‘self-supply’. Entry 5 deals with supply of goods and/or services by a taxable person to another taxable person. As far as number of laws is concerned there would one CGST Law, one IGST Law and different State GST Laws. This Schedule I would appear in all such laws. For a State, say Maharashtra GST Law, the Entry 5 would have to be considered in the context of Maharashtra GST Law alone. For interpreting Entry 5 as appearing in Maharashtra GST Law, one would not / cannot read Schedule / Entry in other Laws (CGST Law, IGST Law, Other State GST Law).Supply without a consideration should be by a taxable person (as understood under Maharashtra GST Law) to another taxable person (also as understood under Maharashtra GST Law). If a supply is not by one taxable person to another under the Maharashtra GST Law, then Entry 5 would not apply. Similar would be the position under CGST Law & IGST Law. Under CGST Law, even if one is registered in different States, one would be regarded as a single ‘taxable person’ under the CGST Law, having different registrations or being regarded as more than one ‘registered person’19. Hence, it appears that Entry 5 does not deal with ‘self-supply’ .Entry 5 appears to be dealing with free supplies.
Other Entries of the Schedule should also trigger GST liability and input tax credit, accordingly, would not be impacted.
Currently, treatment of goods that are lost, stolen, damaged or destroyed is not provided in the Model GST Law.
It is further provided that supply of goods by a registered taxable person (principal) to a job worker, where such principal takes responsibility of payment of GST on goods after completion of job work (terms of Section 43A of the Model GST Law), shall not be treated as supply of goods. In that case, the work done by the job-worker of treatment or process to principal’s goods is a supply of services. Incidentally, if the terms of section 43A are not satisfied by the principal and supply of goods by principal to a job worker is treated as ‘supply’ and return of the goods by job-worker is also treated, consequentially, ‘supply of goods’; then the work done by the job-worker of treatment or process to principal’s goods ought not to be treated as a ‘supply of services’ – this provision is currently not there in the Model GST Law.
4.4 “Supply” in Indian Model GST Law – Section 3(2) and Section 3(3)
Sub-section (2) of Section 3 of the Model GST Law, as such does not limit or expand ‘supply’, but specifies – in Schedule II to the Model GST Law – asto what is or is to be treated as ‘supply of goods’ or a ‘supply of services’.
Sub-section (3) of Section 3 of the Model GST Law provides for the power with the Government of specifying as to what is not to be treated as ‘supply of goods’ or a ‘supply of services’ or both. Schedule II is given as Annexure herein. What is being treated as goods or services is not being discussed herein.
Goods is defined as ‘ “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 ofsupply; Explanation.– For the purpose of this clause, the term ‘moveable property’ shall not include any intangible property’.
Services is defined as ‘ “services’’ means anything other than goods;
Explanation: Services include intangible property and actionable claim but does not include money’.
A significant outcome of specifying what is or is to be treated as ‘supply of goods’ and ‘supply of services’, is the possible elimination of the applicability of dual taxes.
4.5 “Supply” in Indian Model GST Law – Section 3(2A)
Sub-section (2A) of Section 3 provides that an agent who 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.
Agent is defined as ‘ “agent” means a person who carries on the business of supply or receipt of goods and/or services on behalf of another, whether disclosed or not and includes a factor, broker, commission agent, arhatia, del credere agent, intermediary or an auctioneer or any other mercantile agent, by whatever name called, and whether of the same description as hereinbefore mentioned or not’.
Principal is defined as ‘ “principal” means a person on whose behalf an agent carries on the business of supply or receipt of goods and/or services”.
As agent, generally, will be involved in at least two separate supplies at any one time:
– the supply made between the principal and the third party
– the supply of agent’s own services to the principal
An agent, who on behalf the principal carries on the business of supply or receipt of goods would, generally, (i) receive or deliver goods; (ii) hold stock of goods for principal; and (iii) make or receive payment.
What has been deemed to be a supply is the “transaction” between the principal and agent. Only those transactions where the agent carries on the business of supply or receipt of goods and/or services is intended to be covered by section 3(2A).
Accordingly –
– the transaction between the agent and the third party is also to be deemed to be a supply; and
– in such cases, supply of agent’s own services to the principal should be deemed as not a supply.
These provisionare currently not there in the Model GST Law.
The proposed provision in Model GST Law would have the following impact, as far as tax related disclosures are concerned –
Hence, for the basis threshold limit for registration, where agent was considering 10 in the current regime (for service tax purposes), for the same transaction, it would now have to consider 100 (for GST purposes); the threshold limit (Rs. 10 lakhs), however, is likely to remain same.
Where the agent is not carrying on the business of supply or receipt of goods and/or services viz. factor, delcredere agent, estate agent etc. would not be covered for determining such deemed supply.
Incidentally, a clearing and forwarding agent might get covered by such deemed supply provision, which appears to be un-intended. A travel agent would also be covered under such provision of deemed supply.
The Directive issued by the Council of the European Union, in this regards provides as follows:
Where a taxable person acting in his own name but on behalf of another person takes part in a supply of services, he shall be deemed to have received and supplied those services himself.
Under the said Directive, special scheme has been laid out for travel agents, including tour operators. For goods, similar provisions as in Model GST Law are provided for undisclosed agent only.
Redrow case
In a UK House of Lords case of Redrow26, a builder, Redrow, constructed new houses for sale. Most prospective Redrow purchasers could not purchase a Redrow home unless they had a buyer for their existing home. To expedite sales of its homes Redrow instructed an estate agent to value the prospective purchaser’s existing home and to handle the sale. Redrow monitored progress in the marketing of the property, maintaining pressure on the agent to achieve a sale. Redrow entered into an agreement with both the agent and the prospective purchaser that it would pay the estate agent’s fee plus VAT if the prospective purchaser bought a Redrow home. Redrow was not liable to pay the agent’s fee if the prospective purchaser did not purchase a Redrow home.
Redrow advised the agent to enter into a separate agreement in the normal terms with the prospective purchaser, to provide cover in the event that Redrow was not liable to pay the fee if the prospective purchaser bought elsewhere. The instructions to the agent could not be changed without Redrow’s agreement. The agent made a supply of services on which it was obliged under the UK VAT Law to charge VAT .
The issue was whether Redrow’s expenditure was consideration for services supplied by the agent to Redrow. Redrow was only entitled to input tax credit of the tax it paid if the estate agent supplied services to Redrow. The UK Commissioners contended that the estate agent was only supplying services to the prospective purchaser. The House of Lords held that estate agent services were supplied to Redrow:
The service is that which is done in return for the consideration…Questions such as who benefits from the service or who is the consumer of it are not helpful. The answers are more likely to differ according to the interest which various people have in the transaction… The fact that someone else – in this case, the prospective purchaser – also received a service as part of the same transaction does not deprive the person who instructed the service and who has had to pay for it of the benefit of the deduction. … Everything which the agents did was done at the taxpayer’s request and in accordance with its instructions and, in the events which happened, at its expense. The doing of those acts constituted a supply of services to the taxpayer.
Redrow is unusual because both Redrow and the prospective purchaser contracted for a supply of services from the agent. Usually when an entity arranges for a supply to be provided to another entity, it is only the first entity that contracts for the supply.
4.6 “Supply” in Indian Model GST Law – Section 3(4)
Sub-section (4) of Section 3 provides that the supply of any branded service by an aggregator, as defined in section 43B, under a brand name or trade name owned by him shall be deemed to be a supply of the said service by the said aggregator.
What was probably intended to be said here was ‘any service which is branded by an aggregator’ instead of “any branded service by an aggregator”.
Branded services is defined27 as – ‘branded services’ means services which are supplied by an electronic commerce operator under its own brand name or trade name, whether registered or not”. ‘Electronic commerce operator’, in turn, is defined separately, which has a different meaning as that of the ‘aggregator’.
Aggregator is defined as – ‘aggregator’ means a person, who owns and manages an electronic platform, and by means of the application and a communication device, enables a potential customer to connect with the persons providing service of a particular kind under the brand name or trade name of the said aggregator”.
Here also, what is missing is that the supply by persons providing service of particular kind needs to be deemed to be a supply to the aggregator.
5. “Supply” – parting remarks
Hope, this article is not treated as ‘supply’ by the Member (author) to the Bombay Chartered Accountants’ Society (BCAS) or by BCAS to the Member, in any manner so as to result in a GST liability?
Annexure
Schedule II – Matters to be treated as supply of goods or services
1. Transfer
(1) Any transfer of the title in goods is a supply of goods.
(2) 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.
(3) 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.
2. Land and Building
(1) Any lease, tenancy, easement, licence to occupy land is a supply of services.
(2) 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. Transfer of business assets
(1) 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.
(2) 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.
(3) 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.
(4) Where any person ceases to be a taxable person, any goods forming part of the assets of any business carried on by him shall be deemed to be supplied by him in the course or furtherance of his business immediately before he ceases to be a taxable person, unless—
(a) the business is transferred as a going concern to another person; or
(b) the business is carried on by a personal representative who is deemed to be a taxable person.
5. The following shall be treated as “supply of service”
(a) renting of immovable property;
(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 remodelling of any existing civil structure;
(c) temporary transfer or permitting the use or enjoyment of any intellectual property right;
(d) development,design, programming, customisation, adaptation, upgradation, enhancement, implementation of information technology software;
(e) agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act;
(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;
(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
(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.
6. The following shall be treated as supply of goods (a) supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration.
