Supply in GST

Concept of Supply in GST


Supply of goods and supply of services in GST

Supply in GST covers both supply of goods as well as supply of services by vendors or suppliers to the Government Departments, local authorities and other recipients as listed below.

(a)  a department or establishment of the Central Government or State Government; or

(b) local authority; or

(c)   Governmental agencies; or

(d)   an authority or a board or any other body.

(i) set up by an Act of Parliament or a State Legislature; or

(ii) established by any Government, with fifty-one per cent. or more participation by way of equity or control, to carry out any function; or

(e) a society established by the Central Government or the State Government or a Local Authority under the Societies Registration Act, 1860 (21 of1860); or

(f)    public sector undertakings.


Examples of supply of goods to Government/local authorities

Procurement of stationery items, toilet articles, towels, furniture, air-conditioning machines, electrical goods, books and periodicals & medicines, etc.


Examples of supply of services to Government/local authorities

Procurement of security services, car rental services, generator rental services, rental services like office building/land taken on rent, maintenance services, rental of machinery, etc.

There may be supplies which are composite in nature i.e. taxable supplies of goods and services or both which are naturally bundled and supplied in conjunction with each other in the ordinary course of business [Section 2(30) refers].


Examples of Composite supplies to Government/local authorities 

Works Contract services such as road, bridge, building development or renovation or repairing or maintenance services involving supplies of both goods and services

Taxable Supply means supply of goods or services or both which is leviable to tax under GST [Section 2(108) refers]

Exempt supply means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11 of the CGST / SGST Acts or under section 6 of the IGST Act, and includes non-taxable supply. [Section 2(47) refers]


Section 7 of the CGST/SGST Acts 2017: supply includes – (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business.

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