Term Principle of supply under GST

Principle of supply Means


The details about Principle of supply under GST are explained here.

Principle of supply

The taxable event in GST is supply of goods or services or both. Various taxable events like manufacture, sale, rendering of service, purchase, entry into a territory of state etc. have been done away with in favour of just one event i.e. supply. The constitution defines “Goods and Services Tax” as any tax on supply of goods, or services or both, except for taxes on the supply of the alcoholic liquor for human consumption.

The Central and State governments will have simultaneous powers to levy the GST on Intra-State supply. However, the Parliament alone shall have exclusive power to make laws with respect to levy of Goods and Services Tax on Inter-State supply.

The term, “supply” has been inclusively defined in the Act. The meaning and scope of supply under GST can be understood in terms of following six parameters, which can be adopted to characterize a transaction as supply:

1. Supply of goods or services. Supply of anything other than goods or services does not attract GST

2. Supply should be made for a consideration

3. Supply should be made in the course or furtherance of business

4. Supply should be made by a taxable person

5. Supply should be a taxable supply

6. Supply should be made within the taxable territory

While these six parameters describe the concept of supply, there are a few exceptions to the requirement of supply being made for a consideration and in the course or furtherance of business. Any transaction involving supply of goods or services without consideration is not a supply, barring few exceptions, in which a transaction is deemed to be a supply even without consideration. Further, import of services for a consideration, whether or not in the course or furtherance of business is treated as supply

Supply of Goods or Services or Both

Goods as well as services have been defined in the GST Law. The securities are excluded from the definition of goods as well as that of services. Money is also excluded from the definition of goods as well as services, however, activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged are included in services.

Schedule II to the CGST Act, 2017 lists a few activities which are to be treated as supply of goods or supply of services. For instance, any transfer of title in goods would be a supply of goods, whereas any transfer of right in goods without transfer of title would be considered as services.

Further Schedule III to the CGST Act, 2017 spells out activities which shall be treated as neither supply of goods nor supply of services or outside the scope of GST. This includes:

1. Services by an employee to the employer in the course of or in relation to his employment.

2. Services of funeral, burial, crematorium or mortuary including transportation of the deceased.

3. Sale of land and sale of building where the entire consideration has been received after completion certificate is issued or after its first occupation.

Actionable claims are included in the definition of goods, however, Schedule III provides that actionable claims other than lottery, betting and gambling shall be neither goods nor services.

The information on Principle of supply under GST is detailed above.   Comment below your thoughts on Principle of supply under GST.




Learn Exports Imports Free, Click here

Click here to know GST rate of your goods or service

Import Goods attract IGST, CVD and Compensation Cess under GST regime

Safeguard duty and Anti-dumping duty after GST implementation

Section 1 of UTGST Act 2017       

Section 172 of CGST Act, 2017 Removal of difficulties

Section 170 Rounding off of tax, CGST Act, 2017

Sec 168 of CGST Act, 2017 Power to issue instructions or directions          

Section 163 of CGST Act, 2017 Levy of fee            

Publication of information in respect of persons in certain cases, Section 159 of CGST Act, 2017 

Section 156 Persons deemed to be public servants, CGST Act, 2017         

Power to collect statistics, Section 151 of CGST Act, 2017              

Goods and services tax compliance rating, Sec 149 of CGST Act, 2017

Meaning of term Input Tax Credit under GST

Meaning of term Input Service Distributor under GST

What is Demand and Recovery provisions under CGST Act

Increase in threshold limit for MSME under GST

What is Income Tax Act liable to GST

Term Tax incidence under GST

GST Returns Means

What is GST Regime

What is Refunds of fees under GST

 How does Letter of Credit work?

How does STP units work in India?

How does TT (Telegraphic Transfer) work?

 How does Wire transfer work in international business?

 How is assessable value calculated by customs for imports?

How is IGM filed under high sea sale?

 How many of you know the meaning of Exports and Imports in India?

 How many types of imports in India. Types of bills of Entry in India

How many types of shipping bills in export

 How to add Line number in Import General Manifest in Custom in India

How to amend AWB number in Import General Manifest (IGM)

How to import to India from Burkina Faso?

How to export from India to Burkina Faso?

Documents required for Export from Burkina Faso

Customs procedures for Burkina Faso Export

Registration required to export from Burkina Faso

Documents needed for Burkina Faso import

Import Customs processes in Burkina Faso

Import Registration and import Licence procedures in Burkina Faso



Discussion Forum

You can also share your thoughts about this article.
Any one can answer on question posted by Readers