Forms of Supply Quiz

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Questions and Answers

Which of the following is NOT considered a form of supply?

Sale

Gift (correct)

Lease

Transfer

What is the primary requirement for a supply to be valid under the specified criteria?

It should be made in a social context.

It must be for a consideration. (correct)

It should involve barter only.

It must be free of charge.

Which form of supply involves the transfer of ownership for a price?

Barter

Sale (correct)

Lease

Transfer

What is an example of a supply that is NOT illustrated in the mentioned forms?

Donation Signup and view all the answers

Which of the following pairs correctly matches the form of supply with its characteristic?

Barter - involves trade of goods without price Signup and view all the answers

Which term best describes a situation where possession or control is handed over to another person?

Transfer Signup and view all the answers

Which is a common misconception about forms of supply in a business context?

Form of supply must solely be a purchase. Signup and view all the answers

In which scenario would a supply likely not meet the criteria for being in the course or furtherance of business?

A private individual sells a personal item. Signup and view all the answers

What does the term 'lease' specifically refer to?

A legal agreement for the use of property for a set period Signup and view all the answers

Under GST, how are licenses, leases, and rentals of goods classified?

As supplies of service Signup and view all the answers

What is the meaning of 'consideration' in this context?

Any payment or exchange for goods or services Signup and view all the answers

What happens to perquisites provided by the employer in lieu of services rendered by the employee?

They are not subject to GST. Signup and view all the answers

Which of the following is blocked under the input tax credit (ITC) scheme?

Membership of a club. Signup and view all the answers

When is a deposit considered as payment for supply?

When it is applied as consideration by the supplier Signup and view all the answers

Which of the following is NOT considered as consideration?

Subsidies from government entities Signup and view all the answers

What is a requirement for free services provided by the employer to not be subjected to GST?

They are provided to all employees uniformly. Signup and view all the answers

What best describes 'disposal' as defined by Black’s law dictionary?

Any act involving the sale, exchange, or use of a thing Signup and view all the answers

How are the services provided by the employer to the employee categorized under GST?

Potentially as a supply due to the relationship. Signup and view all the answers

What does the term 'cost-to-company (C2C)' refer to in the context of employment?

The complete cost of employment including benefits. Signup and view all the answers

How is consideration determined in a transaction?

It can be made by a third person and in any form Signup and view all the answers

What characterizes a supply made for consideration?

It implies a reciprocal exchange of value Signup and view all the answers

What is one potential view regarding free services provided by the employer to employees?

It constitutes an exchange transaction. Signup and view all the answers

Under which section could the employer-employee relationship be assessed for potential supply of services?

Section 15. Signup and view all the answers

Which of the following is NOT impacted by the input tax credit (ITC) scheme under GST?

Club membership fees. Signup and view all the answers

What is required for a supplier under GST when making taxable supplies across different States/UTs?

State-wise registration based on aggregate turnover Signup and view all the answers

Which establishments are considered 'distinct persons' under the GST law?

Registered establishments in different States/UTs Signup and view all the answers

What is the basis for obtaining GST registration?

Annual turnover exceeding a threshold limit Signup and view all the answers

What occurs when a supplier has multiple places of business within the same State/UT?

He can obtain a single registration for that State/UT Signup and view all the answers

What is the main function of Q Ltd in relation to R Ltd?

Q Ltd has a deciding role in corporate policy and operations management Signup and view all the answers

In GST terms, what does 'distinct persons' imply about establishments with the same ownership?

They are distinct if registered separately in different States/UTs Signup and view all the answers

Which of the following is NOT a requirement for GST registration?

Must have a unique identification number for each establishment Signup and view all the answers

What is the purpose of obtaining GST registration in various States/UTs?

To comply with local taxation laws based on location of supply Signup and view all the answers

In the scenario where Bholu is appointed to procure goods for Anmol, what is Bholu's role classified as?

Procurement agent Signup and view all the answers

When goods are invoiced in the agent's name and supplied to the principal, how is the agent characterized under Para 3 of Schedule I?

Agent of the principal Signup and view all the answers

In the example involving Mandaar and Manimani Bank, what best describes Mandaar's involvement?

Mandaar is providing auctioneering services. Signup and view all the answers

What is a key factor in determining whether an agent is considered a supplier of goods under GST?

Who issues the invoice for the goods. Signup and view all the answers

What happens in the scenario where the invoice for goods is issued by the supplier directly to the principal?

The agent has no role as a supplier. Signup and view all the answers

How can one determine that Bholu is not an agent for the supply of goods in the scenario provided?

Bholu’s actions do not involve the supply or receipt of goods. Signup and view all the answers

Which statement correctly interprets the role of the auctioneer in the auction scenario with Manimani Bank?

The auctioneer only facilitates the auction process. Signup and view all the answers

What would characterize an agent in a situation where they have issued an invoice in their name for goods supplied?

They are classified under Para 3 of Schedule I as a supplier. Signup and view all the answers

Study Notes

Forms of Supply

Supply encompasses all forms of supply, including sale, transfer, barter, exchange, license, rental, lease, and disposal.
Sale: The act of selling, involving the transfer of ownership and title for a price.
Transfer: Conveying or moving from one place, person, etc., to another, including transferring possession or control.
Barter: Exchange of goods or services for other goods or services without monetary payment.
Exchange: Mutual transfer of goods or services for other goods or services, typically with a monetary consideration.
Licence: Granting permission to use or exploit intellectual property or assets for a specific purpose.
Rental: Agreement to rent something for a specific period, typically involving regular payments.
Lease: Agreement to use land, building, vehicle, or equipment for an agreed period, involving periodic payments.
Disposal: Sale, pledge, giving away, use, consumption, or any other disposition of an asset.

Consideration

Consideration is the payment or value exchanged for a supply.
It can be in money or in kind, including anything given or made in exchange for something else.
Consideration doesn't necessarily flow from the recipient of the supply; it can be made by a third person.
Government subsidies are not considered consideration.

Distinct Persons

Establishments of a person with separate registrations, whether within the same State/UT or in different States/UTs, are considered distinct persons.
Two establishments belonging to the same person, even if one is registered and the other is not, are considered as establishments of distinct persons.

Examples of Distinct Persons

Example 1: Q Ltd. owns a controlling interest in R Ltd. and has a deciding role in R Ltd.'s operations. Q Ltd. and R Ltd. are considered related persons and therefore distinct persons.
Example 2: A person with one registered establishment in a State/UT and another establishment in a different State/UT (not necessarily registered) are considered distinct persons.

Agent in Supply

If an agent procures goods on behalf of the principal and the invoices are issued in the agent's name, the agent is considered an agent for supply purposes.
Example: Anmol appoints Bholu to procure goods. Bholu identifies suppliers and instructs them to send goods and invoice Anmol directly. In this case, Bholu is only a procurement agent and not an agent for supply.
When the goods are supplied to the customer by the agent, the agent is considered an agent for supply purposes.
Example: Manimani Bank appoints Mandaar (auctioneer) to auction goods. The goods are sold by Manimani Bank to the highest bidder. The invoice is issued by Manimani Bank. Mandaar is only an auctioneer and not an agent for Supply purposes.

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Description

Test your knowledge on the various forms of supply including sale, barter, rental, and more. This quiz covers key concepts and definitions to help you understand how goods and services are exchanged in different scenarios.