Skip to content

CA Final · Indirect Tax Laws · Supply under GST

Meridian Analytics Pvt Ltd, a registered company in Pune, takes consulting services from a firm in Singapore and pays it a fee. The services are used for the personal benefit of a director and not for the company's business. Under Section 7(1) of the CGST Act, 2017, how is this transaction treated?

The transaction is a supply. Section 7(1)(b) treats import of services for a consideration as supply whether or not it is made in the course or furtherance of business, so personal use by the director does not take it outside the definition.

  1. AIt is not a supply because it is not in the course or furtherance of business
  2. BIt is a supply because import of services for a consideration is a supply whether or not it is in the course or furtherance of businessCorrect
  3. CIt is a supply only if the Singapore firm is registered in India
  4. DIt is a supply only if it is made without consideration

Explanation

Section 7(1)(b) includes import of services for a consideration whether or not in the course or furtherance of business. The business-use test applies to clause (a), not to clause (b). The first option wrongly applies the clause (a) condition to an import of services.

Did you get it right without looking?

One question tells you little. A timed set on Supply under GST shows your real accuracy, how long you take and where you lose marks.

Practise Supply under GSTFree diagnostic mock

More Supply under GST questions