Schedule- II to CGST Act, 2017 provides a list of activities and transactions to determine whether it is a supply of Goods or a supply of Services.
Such determination is very much important to select appropriate category while applying for registration, selection of HSN Codes, selection of rate of tax, determination of place of Supply, determination of time of Supply, invoicing, returns, tax payments, etc.
In this article, we will go through the specific list of goods/services provided under law along with their nature of supply.
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Nature of Activity or Transactions |
Supply of Good or Service ?? |
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Transfer of Goods |
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| 1) | Any transfer in the title of Goods | It will be considered as Supply of Goods |
| 2) | Any transfer of right in goods without transferring title of Goods | It will be considered as Supply of Services |
| 3) | Any transfer of right in undivided share in goods without transferring title of Goods | It will be considered as Supply of Services |
| 4) | Any transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payment of full consideration as agreed | It will be considered as Supply of Goods |
Supply of Land and Building |
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1)
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In case of supply of Land on:-
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It will be considered as Supply of Services |
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2)
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Supply of Any Building (commercial, industrial, residential)
(residential complex should be used for business or commerce) |
It will be considered as Supply of Services
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Treatment or Process |
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| Any treatment or process which is applied to another person’s goods | It will be considered as Supply of Services | |
Treatment of Business Assets |
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1)
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Where goods forming part of assets of business:
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Such transfer or disposal will be considered as Supply of Goods |
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2)
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Where goods forming part of assets of business:-
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Such private usage or made available for non-business use will be considered as Supply of Service
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3)
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Where taxable person ceases to be a taxable person.
Any goods forming part of assets of business shall be deemed to be supplied by him in the course or furtherance of his business immediately before ceases to be taxable person, except in case of following situations: –
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Such activity will be considered as supply of Goods
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Supply of Services |
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| 1) |
Renting of Immovable property |
It will be considered as Supply of service |
| 2) |
Service by way of Construction of a complex, building, civil structure or part thereof |
It will be considered as Supply of service |
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3)
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Construction of complex or building intended for sale to a buyer wholly or partly Except where entire consideration has been received after
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It will be considered as Supply of service
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Competent Authority means : > Government or any authority, > authorized to issue completion certificate, > under the law for the time being in force. In case, certificate is not required from Government or any authority, then competent authority will be considered out of followings:- 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; |
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Expression “construction” includes additions, alterations, replacements or re-modelling of any existing civil structures
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| 4) | Temporary transfer or permitting the use or enjoyment of any intellectual property right | It will be considered as supply of service |
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5)
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Supply of following services for Information technology software in form of:
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It will be considered as supply of service
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| 6) |
Agreeing to the obligation: I. to refrain from an act, or II. to tolerate an act or a situation, or III. to do an act; |
It will be considered as supply of service |
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7)
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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 |
It will be considered as supply of service |
Supply of Goods |
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| Supply of goods by any unincorporated association or body of persons to a member thereof
for cash, deferred payment or other valuable consideration |
It will be treated as supply of goods | |
Composite Supply |
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1)
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Works Contract
Works Contract means a Contract for:-
of any Immovable property, wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such property |
It will be considered as supply of service
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| 2) | Supply, by way of or as part of any service or in any manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption)
and such supply is for cash, deferred payment or other valuable consideration |
It will be considered as supply of service |
Earlier, above-mentioned listed activities were covered under “Scope of Supply” as prescribed under section 7 of CGST Act 2017. However, pursuance to CGST Amendment Act, 2018, such list is excluded from “Scope of Supply” and hence only used for classification of nature of supply.
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