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CMA Final · Indirect Tax Laws and Practice · Supply under GST

A manufacturer, Kaveri Engineering Ltd, uses an existing machine for its own business and later sells it to a buyer. A trader, Mehta Agencies, separately wants certainty on whether a particular arrangement it undertakes amounts to a supply. Which statement is correct under the Act's text?

Mehta Agencies can apply for an advance ruling, because Section 97(2)(g) permits a question on whether any particular thing done by the applicant amounts to or results in a supply. Schedule III activities are neither goods nor services under Section 7(2), and Section 11 concerns exemption, not rulings.

  1. ASection 7(2) allows the Government to treat any activity specified in Schedule III as a supply of goods
  2. BUnder Section 97(2)(g), an applicant can seek an advance ruling on whether a particular thing done by it amounts to or results in a supplyCorrect
  3. CUnder Section 11, an advance ruling can be granted by exempting the transaction from tax
  4. DUnder Section 7(3), the Government can decide that an activity in Schedule III is taxable

Explanation

Section 97(2)(g) lists, as a question for advance ruling, whether any particular thing done by the applicant amounts to or results in a supply of goods or services or both. Section 7(2) says Schedule III activities are neither supply of goods nor services, and Section 7(3) operates subject to sub-section (2). Section 11 deals with exemption, not rulings.

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