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

Under Section 7(1) of the CGST Act, 2017, which of the following activities is a supply even though it is made WITHOUT any consideration, provided it is an activity specified in Schedule I?

Section 7(1)(c) treats activities specified in Schedule I as supply even when made without consideration. Transactions between related or distinct persons in the course or furtherance of business fall in this category. The other options carry consideration and are covered by other clauses of Section 7(1).

  1. AA sale of goods by a trader to a customer for cash in the course of business
  2. BImport of services by a person for a consideration for personal use
  3. CSupply of goods or services between related persons or between distinct persons in the course or furtherance of business, as specified in Schedule ICorrect
  4. DA lease of a factory building by a company against monthly rent

Explanation

Section 7(1)(c) brings within supply the activities specified in Schedule I when made or agreed to be made without consideration. The other options involve consideration and are covered by clauses (a) or (b), not by the no-consideration limb. Clause (c) is the only one that applies without consideration.

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