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CMA Intermediate · Direct and Indirect Taxation · Concept of Supply including Composite and Mixed Supplies

Under the CGST Act, 2017, activities or transactions specified in Schedule III are treated as:

Schedule III activities are treated neither as a supply of goods nor as a supply of services. Section 7(2)(a) applies notwithstanding the wide definition of supply in section 7(1), so such activities fall outside GST altogether.

  1. ASupply of goods only
  2. BSupply of services only
  3. CNeither a supply of goods nor a supply of servicesCorrect
  4. DComposite supply taxed at the principal supply rate

Explanation

Section 7(2)(a) provides that, notwithstanding sub-section (1), activities or transactions specified in Schedule III shall be treated neither as a supply of goods nor a supply of services. Hence no GST is leviable on them. Treating them as goods or services, or as a composite supply, contradicts this provision.

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