Scope of Supply under Section 7 of CGST Act

Scope of Supply under Section 7 of CGST Act

The Central Goods and Services Tax (CGST) Act, 2017 defines "supply" as including all forms of supply of goods or services or both made or agreed to be made for a consideration by a person in the course or furtherance of business.

Section 7 of the CGST Act provides a list of activities that are considered to be supplies. These activities include:

• Sale, transfer, barter, exchange, licence, rental, lease or disposal of goods
• Supply of goods or services by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration
• The activities or transactions, by a person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration
• The activities specified in Schedule I, made or agreed to be made without a consideration

The activities listed in Section 7 are not exhaustive and any activity that is not specifically mentioned in the section may still be considered to be a supply if it has the same essential characteristics as one of the activities listed.

For example, the supply of a warranty or guarantee on goods or services would be considered to be a supply even though it is not specifically mentioned in Section 7.

The scope of supply under Section 7 is important because it determines whether or not an activity is subject to GST. If an activity is considered to be a supply, then GST will be levied on the value of the supply.

The following are some of the key points to remember about the scope of supply under Section 7:

• Supply includes all forms of supply of goods or services or both made or agreed to be made for a consideration by a person in the course or furtherance of business.
• The activities listed in Section 7 are not exhaustive and any activity that is not specifically mentioned in the section may still be considered to be a supply if it has the same essential characteristics as one of the activities listed.
• The scope of supply is important because it determines whether or not an activity is subject to GST.

I hope this blog has been helpful in understanding the scope of supply under Section 7 of the CGST Act.