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CA Final · Indirect Tax Laws · Supply under GST

Mehta Traders Pvt Ltd, a registered dealer in Surat, sells taxable goods to Kapoor Retail. Under Section 7 of the CGST Act, 2017, which of the following is a condition for an activity to fall within the basic scope of 'supply' under clause (a) of sub-section (1)?

A supply under Section 7(1)(a) must be made or agreed to be made for a consideration by a person in the course or furtherance of business. Supplies without consideration qualify only if listed in Schedule I, so the consideration and business conditions define the basic scope.

  1. AIt must be made for a consideration by a person in the course or furtherance of businessCorrect
  2. BIt must be made without any consideration between related persons
  3. CIt must be an import of services for which no consideration is paid
  4. DIt must be an activity undertaken by a local authority as a public authority

Explanation

Section 7(1)(a) covers all forms of supply 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. Supplies without consideration are covered only if specified in Schedule I under clause (c). Activities of public authorities, if notified, are treated as neither goods nor services.

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