Activities to be treated as Supply even if made Without Consideration

According to Schedule I of Sec 7 of CGST Act 2017 following Activities to be treated as Supply even if made Without Consideration:-

1. Permanent transfer or disposal of business assets where input tax credit has been availed on such assets.

2. Supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business:

Provided that gifts not exceeding fifty thousand rupees in value in a financial year by an employer to an employee shall not be treated as supply of goods or services or both.

3. 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.

4. Import of services by a taxable person from a related person or from any of his other establishments outside India, in the course or furtherance of business.

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List of Items on which GST Cess is applicable

Pan Masala - 60%
Lemonade - 12%
Aerated Waters - 12%
Unmanufactured tobacco (without lime tube) – bearing a brand name - 71%
Unmanufactured tobacco (with lime tube) – bearing a brand name - 65%
Tobacco refuse bearing a brand name -61%
Cigar and cheroots - 21% or Rs. 4170 per thousand, whichever is higher
Cigarillos - 21% or Rs. 4170 per thousand, whichever is higher
Cigarettes containing tobacco other than filter cigarettes, of length not exceeding 65 millimetres - 5% + Rs.1591 per thousand
Cigarettes containing tobacco other than filter cigarettes, of length exceeding 65 millimetres but not exceeding 75 millimetres - 5% + Rs.2876 per thousand
Filter cigarettes of length (including the length of the filter, the length of filter being 11 millimetres or its actual length, whichever is more) not exceeding 65 millimetres - 5% + Rs.1591 per thousand
Filter cigarettes of length (including the length of the filter, the length of filter being 11 millimetres or its actual length, whichever is more) exceeding 65 millimetres but not exceeding 70 millimetres - 5% + Rs.2126 per thousand
Filter cigarettes of length (including the length of the filter, the length of filter being 11 millimetres or its actual length, whichever is more) exceeding 70 millimetres but not exceeding 75 millimetres - 5% + Rs.2876 per thousand
Other cigarettes containing tobacco - 5% + Rs.4170 per thousand
Cigarettes of tobacco substitutes - Rs.4006 per thousand
Cigarillos of tobacco substitutes - 12.5% or Rs. 4,006 per thousand whichever is higher
Others - 12.5% or Rs. 4,006 per thousand whichever is higher
Hookah' or 'gudaku' tobacco bearing a brand name - 72%
Tobacco used for smoking 'hookah' or 'chilam' commonly known as 'hookah' tobacco or 'gudaku' not bearing a brand name -17%
Other water pipe smoking tobacco not bearing a brand name. -11%
Smoking mixtures for pipes and cigarettes - 290%
Other smoking tobacco bearing a brand name -49%
Other smoking tobacco not bearing a brand name -11%
“Homogenised” or “reconstituted” tobacco, bearing a brand name -72%
Chewing tobacco (without lime tube) - 160%
Chewing tobacco (with lime tube) - 142%
Filter khaini - 160
Preparations containing chewing tobacco -72%
Jarda scented tobacco -160%
Snuff -72%
Preparations containing snuff - 72%
Preparations containing chewing tobacco -72%
Tobacco extracts and essence bearing a brand name -72%
Tobacco extracts and essence not bearing a brand name -65%
Cut tobacco -20%
Pan masala containing tobacco ‘Gutkha' -204%
All goods, other than pan masala containing tobacco 'gutkha', bearing a brand name - 96%
All goods, other than pan masala containing tobacco 'gutkha', not bearing a brand name -89%
Coal; briquettes, ovoids and similar solid fuels manufactured from coal - Rs. 400 per tonne
Lignite, whether or not agglomerated, excluding jet - Rs. 400 per tonne
Peat (including peat litter), whether or not agglomerated - Rs. 400 per tonne
Motor vehicles for the transport of 10 or more persons but not more than 13, including the driver - 15%
Petrol, Liquefied petroleum gases (LPG) or compressed natural gas (CNG) driven motor vehicles of engine capacity not exceeding 1200cc and of length not exceeding 4000 mm. -1%
Diesel driven motor vehicles of engine capacity not exceeding 1500 cc and of length not exceeding 4000 mm. - 3%
Hybrid Motor Vehicles of engine capacity exceeding 1500 cc - 15%
Mid Segment Cars of engine capacity not exceeding 1500 cc - 17%
Larges Cars [Other then Sports Utility Vehicles (SUV)] of engine capacity exceeding 1500 cc - 20%
Sports Utility Vehicles (SUV) engine capacity exceeding 1500 cc and length eceeding 4000 mm with ground base exceeding 170 mm - 22%
Motorcycles of engine capacity exceeding 350 cc. -3%
Aircrafts for personal use -3%
Yachts and other vessels for pleasure or sports; rowing boats and canoes - 3%

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Negative List under GST

1. Services by an employee to the employer in the course of or in relation to his employment.
2. Services by any Court or Tribunal established under any law for the time being in force.
3. Functions performed by the MPs, MLAs, Members of municipality and Member of other local authorities.
4. Duties performed by any person who holds any constitutional post.
5. Duties performed by any person as a Chairperson or a Member or a Director in a body established by the Central Government or a State Government or local authority and who is not deemed as an employee before the commencement of this clause.
6. Services of funeral, burial, crematorium or mortuary including transportation of the deceased.
7. Sale of land and sale of building where entire consideration has been received after issuance of completion certificate.
8. Actionable claims other than lottery, betting and gambling.

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Reverse Charge Mechanism (RCM) Under GST

Reverse charge is a mechanism under which the recipient of the goods or services is liable to pay tax instead of the provider of the goods and services. Under the normal taxation regime, supplier of Goods or Service collects the tax from the buyer of Goods or Service and deposits the same after adjusting the output tax liability with the input tax credit available.But under reverse charge mechanism, liability to pay tax shifts from supplier to recipient.

Scope of Reverse Charge Mechanism

• If a person not registered under GST supplies Goods or Services to a person who is registered under GST, then in such cases – Reverse Charge Mechanism would get applicable i.e. the GST would be required to be paid by the Recipient of Goods or Service directly to the Govt on behalf of the supplier. Reverse Charge Mechanism would get applicable only if specified Tax get payer makes inward supply of specified Goods from Unregistered Person. An unregistered dealer cannot make interstate supplies. This means that Reverse Charge will apply only in case of intra-state supply by an unregistered dealer. All persons who are required to pay tax under reverse charge have to register for GST irrespective of the threshold limit.

Input Tax Credit under Reverse Charge Mechanism
Tax paid on reverse charge basis will be available for input tax credit if such goods or services are used, or will be used, for business. The recipient (i.e., who pays reverse tax) can avail input tax credit.

Time Of Supply For Goods Under Reverse Charge Mechanism
Time of supply will be the earliest of the following dates:
When the goods are received i.e. the date of receipt.
When the amount is paid i.e. the date of payment. Date of payment shall be earliest of ‘The date on which payment has been debited from supplier’s bank account’ Or ‘When the recipient records the payment in his books of account’
The date immediately after 30 days from the date the supplier issues invoice.
If the assesse fails to determine the time of supply from the above-mentioned clauses, then the time of supply shall be the date on which recipient enters in his books of account.

Time of Supply for Services Under Reverse Charge
Time of supply will be the earliest of the follwing dates:
When the amount is paid i.e. the date of payment. Date of payment shall be earliest of – ‘The date on which payment has been debited from supplier’s bank account’ Or ‘When the recipient records the payment in his books of account’.
The date immediately after 60 days from the date the supplier issues invoice.
If the assesse fails to determine the time of supply from the above-mentioned clauses, then the time of supply shall be the date on which recipient of service enters in his books of account.

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