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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Supply under GST

Under the CGST Act, 2017, which of the following is the legal effect of an activity listed in Schedule III?

Activities listed in Schedule III are treated neither as a supply of goods nor as a supply of services, as provided in section 7(2)(a). They are outside the scope of supply altogether, so they are not exempt supplies and attract no GST.

  1. AIt is treated neither as a supply of goods nor as a supply of servicesCorrect
  2. BIt is treated as a supply of services only if made for consideration
  3. CIt is treated as a supply of goods only if made in the course of business
  4. DIt is treated as an exempt supply that must be reported in the return

Explanation

Section 7(2)(a) provides that activities or transactions specified in Schedule III shall be treated neither as a supply of goods nor a supply of services. They therefore fall outside the scope of supply altogether. Treating them as exempt supplies is wrong, because an exempt supply is still a supply.

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