CMA Final · Indirect Tax Laws and Practice · Supply under GST
Under Section 7 of the CGST Act, 2017, which statement about activities or transactions specified in Schedule III is correct?
Schedule III activities or transactions are treated neither as a supply of goods nor a supply of services. Section 7(2)(a) overrides sub-section (1), so they stay outside the scope of supply even where consideration is paid and the activity is in the course of business.
- AThey are supplies of services taxable at the lowest rate
- BThey are treated neither as a supply of goods nor a supply of services, notwithstanding sub-section (1)Correct
- CThey are supplies only if made without consideration
- DThey are supplies of goods unless the Council recommends otherwise
Explanation
Section 7(2)(a) begins with 'notwithstanding anything contained in sub-section (1)' and says Schedule III activities are treated neither as supply of goods nor of services. So even if consideration exists, they are outside supply; option C reverses this.
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