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

Under the CGST Act, 2017, which of the following is a necessary feature of a taxable 'supply' in the ordinary scheme of the Act (leaving aside the transactions specifically listed in Schedule I)?

A supply, apart from the specified Schedule I transactions, must be made for a consideration in the course or furtherance of business. Profit, unrelated parties or payment only in money are not required, since consideration may be monetary or non-monetary.

  1. AIt must be made for a consideration and in the course or furtherance of businessCorrect
  2. BIt must result in a profit to the supplier
  3. CIt must be made only to an unrelated person
  4. DIt must be made only in exchange for money

Explanation

Supply under section 7 includes all forms of supply made or agreed to be made for a consideration by a person in the course or furtherance of business. Profit motive is not required, relatedness of parties does not exclude supply, and consideration can be in money or otherwise, so the other options add conditions the Act does not impose.

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