Section 7 - Scope of supply of CGST ACT, 2017

      7. (1) For the purposes of this Act, the expression “supply” includes––


              (a) all forms of supply of goods or services or both such as 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 or
furtherance of business;


            (c) the activities specified in Schedule I, made or agreed to be made without a
consideration; and


           (d) the activities to be treated as supply of goods or supply of services as
referred to in Schedule II.


     (2) Notwithstanding anything contained in sub-section (1),––


          (a) activities or transactions specified in Schedule III; or


          (b) such activities or transactions undertaken by the Central Government, a
State Government or any local authority in which they are engaged as public
authorities, as may be notified by the Government on the recommendations of the
Council,
shall be treated neither as a supply of goods nor a supply of services.


    (3) Subject to the provisions of sub-sections (1) and (2), the Government may, on the
recommendations of the Council, specify, by notification, the transactions that are to be
treated as—


       (a) a supply of goods and not as a supply of services; or


       (b) a supply of services and not as a supply of goods

Analysis by Experts

By GST Payer, 10 months ago

This section is about scope of transactions to be covered under supply of Goods and Services. It is interesting to note that the word supply is not defined in section 2.

However dictionary meaning of supply can be considered for this section unless we get a defined meaning of supply in form of explanation or circular.

Here scope of supply is defined to include:

  • Supply of goods or services or both such as 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.
  • import of services for a consideration whether or not in the course or furtherance of busines : It is to be noted that scope of supply includes services imported even for personal purposes. Taxability under GST needs to be checked in continuing sections.
  • Activities of Schedule I without consideration.
  • Activities referred in Schedule II.

Certain services are excluded from scope of supply. Activities specified in Schedule III and services provided by public authorities are excluded from scope, further government may notify services which will be excluded from scope of supply.

Government may specify the transactions which should be treated as supply of goods and not as supply of services, similarly government may specify transaction which should be considered as supply of services and not supply of goods. - By a notification after recommending with council.

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