Supply under GST regime

  • Contributed by CA Vikash Parakh

    The term ‘supply’ includes all forms of supply of goods or services, supplied or to be supplied, for a consideration, in the course or for furtherance of business. It will include sale, transfer, barter/exchange, license, rental, lease & disposal.

    However, there are specific types of supplies mentioned in the law which will be deemed as supply even if made without a consideration.

    The different types of supplies may be categorised as under:

    • Supplies made for a consideration in the course of or for furtherance of business.
    • Supplies made without consideration –
      • Permanent transfer/disposal of business assets
      • Inter-State Stock transfers between units of same entity
      • Supplies of goods/services between related persons
      • Supplies between Principal and Agent


    Time of Supply

    • Time of supply is the time when the liability to pay tax on a particular supply arises
    • In case of goods, time of supply shall be the earliest of
      • date of issue invoice,
      • removal of goods or
      • receipt of payment.
    • In case of services, time of supply shall be the earliest of the
      • date of issue of invoice (if invoice issued within 30 days),
      • date of providing service (if invoice not issued within 30 days) or
      • date of receipt of payment.


    Special Types of Supplies

    Composite Supply

    It comprises of two or more supplies, one of which is treated as Principal supply. The rates for item considered as principal shall be the tax rate for such supply.

    Mixed Supply

    It also comprises of two or more supplies, but the tax rate of such combined supply will be considered to be the highest rate amongst all the items present in such supply.


    Sale of Goods on Approval/ Return

    • Where the goods are being sent or taken on approval for sale or return, the supply shall be deemed
      • either at the time of supply or
      • 6 months from the date of removal, whichever is earlier
    • Such goods can be sent under delivery challan
    • If sale not effected or goods not returned back within 6 months from date of removal, it shall be deemed as supply made after expiry of said 6 months and supplier will have to issue Tax Invoice accordingly
    • As per transitional provisions, where any goods sent under approval basis not earlier than 6 months before the appointed day are rejected or not approved and returned to the seller within 6 months of the appointed day then no GST shall be payable thereon.


    Key Points – Place of Supply

    • Where supply involves movement of goods then place of supply shall be termination of movement of goods for delivery to recipient.
    • Where no movement of goods is involved then place of supply shall be the location of goods at the time of delivery to the recipient.
    • In case of supply of services related to immovable property, place of supply shall be location of such property
    • In case of Exports place of supply shall be location outside India where it has been exported (i.e. non taxable territory).
    • In case of Services provided within India, in most general cases place of supply shall be location of the recipient.
    • Where either the supplier or recipient of service is outside India then in most general cases, place of supply of services shall be the location of the recipient.


    Inputs sent To Job Worker

    • A registered person (principal) may send inputs, under intimation, without payment of tax to a Job Worker for job work.
    • It shall bring back inputs within 1 year of being sent out, to any of his place of business, without payment of tax.
    • Principal supplying goods from the place of business of the job worker shall declare the place of such unregistered job worker as his additional place of business.
    • If the goods are not brought back in the specified period then it shall be deemed as supply at the hands of the Principal.
    • As per the transitional provisions if the goods already with the job worker are returned back within 6 months from the appointed day then no tax shall be payable on the same


    Stock Transfers

    • Where the location of the supplier and the place of supply of the goods/services are in the same state then it shall be intra state supply.
    • Under GST regime any stock transfer within state having same GSTN will not be liable to tax.
    • However IGST will be liable to be paid on any inter-state stock transfer made between units/branches of same entity located in different states.


    Tax Invoice

    • For Supply / Inter-State Stock Transfer – Issue Tax Invoice
    • For interstate supply- place of supply along with name of the state is to be indicated in the Invoice.
    • Where the recipient is unregistered and the value of taxable supply is Rs 50,000/- or more; name and address of the recipient and address of delivery with State and Code should also be mentioned in the Invoice.
    • Consolidated daily Tax invoice may be issued for invoices below Rs 200/- for supplies made to unregistered persons and where such recipient do not want tax invoices.


    Delivery Challan

    • The Delivery challan shall be issued as:
      1. Original for Consignee
      2. Duplicate for Transporter
      3. Triplicate for Consignor
    • The serial number of document should not exceed sixteen characters.
    • The serial number of document cannot contain any special character except “-“and “/” (dash and slash).


    E-Way Bill (as per Draft Rules)

    • While transporting goods having value exceeding Rs.50,000/- in relation to supply or otherwise; an E-Way bill has to be generated in the prescribed form on the common portal.
    • Information relating to goods transported has to be filled in by such supplier.
    • After generation of the E-way Bill a unique bill number is generated (EBN) is made available to supplier, recipient & the transporter.
    • In case of multiple consignments a consolidated e-way bill can generated in FORM GST INS 02.
    • The transporter shall carry the invoice or bill of supply or delivery challan and copy of e-way bill or the EBN either physically or mapped to Radio Frequency Identification Device (RFID).

    Views presented in this article are personal view of the author. Information presented in this article is intended for information purpose only and does not constitute any legal opinion or advice. Readers and Users are requested to seek formal legal advice prior to acting upon any of the information provided herein.