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GST Update 15.10.2016

FAQ ON GST-PART-IV:- CHAPTER 4 – MEANING AND SCOPE OF SUPPLY

GST DAILY DOSE OF UPDATION:-
 

FAQ ON GST-PART-IV:- CHAPTER 4 – MEANING AND SCOPE OF SUPPLY
 
Question 10: This speaks that if an individual buys a car for personal use and after a year sells it to a car dealer, it will not be termed as supply in terms of Model GST law because supply is not made by the individual in the course or furtherance of business. Further, no input tax credit was admissible on such car at the time of its acquisition as it was meant for non-business use. Thus sale and purchase of exclusively personal benefit which has nothing to do with furtherance of business has been kept out of the scope of GST.

Question 11: This speaks that if a dealer of air-conditioners transfers an air conditioner from his stock in trade, for personal use at his residence the transfer shall constitute a supply because as per Schedule-I (1) business assets put to a private or non-business use without consideration will be treated as supply. The main problem arising in this situation will be of valuation of such transfer and who will be termed as recipient of goods.

Question 12: It speaks that provision of service or goods by a club or association or society to its members will be treated as supply. This matter currently has been through a lot of litigation because courts have held that club and its members will be treated as one entity only. For reference, we can see the recent decisions of Karnavati Club Limited v. Union of India [2010(20)STR 169 (Guj.)] and Ranchi Club Limited v. Chief Commissioner of C.Ex. & S.T. [2012(26)STR 401(Jhar.)].Further amendment was carried out in the current service tax law itself to overcome the decisions. It is highly probable that same litigation continues in future too.

Question 15: This speaks that Works contract and catering services shall be treated as supply of service as specified in Schedule-II of MGL. This must put a stop to the ongoing litigation on the classification of these activities as sale or service. As a result of dispute, these activities are currently subject to both sales tax and service tax leading to double taxation.
We will carry some other questions in our next update.
 
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