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

Which of the following is correctly stated regarding Section 7(2) of the CGST Act, 2017?

Schedule III activities are treated neither as a supply of goods nor a supply of services under Section 7(2), notwithstanding Section 7(1). They fall outside supply altogether, unlike exempt supplies under Section 11, which remain supplies but are relieved from tax.

  1. AActivities in Schedule III are treated as supply of services only
  2. BActivities in Schedule III are treated neither as a supply of goods nor a supply of services, notwithstanding Section 7(1)Correct
  3. CActivities in Schedule III are exempt under Section 11 and remain supplies
  4. DActivities in Schedule III are supplies of goods when made without consideration

Explanation

Section 7(2) begins with 'notwithstanding anything contained in sub-section (1)' and says Schedule III activities are neither supply of goods nor services. They are outside the scope of supply, which is different from being exempt under Section 11, where a supply exists but tax is not levied.

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