GST Supply and Business Definitions Quiz
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Questions and Answers

What qualifies as a supply under GST?

  • Any supply made by an individual in personal capacity
  • Supplies made in the course or furtherance of business (correct)
  • Supplies related to personal hobbies or interests
  • Supplies that do not generate monetary benefits

    • Which of the following is NOT included in the definition of 'business' according to the content provided?

  • Profession
  • Commerce
  • Trade
  • Volunteer work (correct)

    • What type of activities does the term 'in the course or furtherance of business' include?

  • Personal activities unrelated to work
  • Activities that are irregular or occasional
  • Activities incidental or ancillary to any trade or commerce (correct)
  • Only activities aimed at monetary profit

    • Which of the following best describes a supply made by an individual in a personal capacity?

    <p>It is exempt unless it falls under the definition of 'business'</p> Signup and view all the answers

    Which of the following activities could be classified as a supply under GST?

    <p>Provision of services by a club or association as part of its activities</p> Signup and view all the answers

    Which of the following entities is considered an individual under GST laws?

    <p>A firm</p> Signup and view all the answers

    What is the primary focus of the Study Material regarding GST laws?

    <p>Provisions of CGST and IGST laws</p> Signup and view all the answers

    Which of the following is NOT included in the definition of 'person' under GST?

    <p>A community of individuals</p> Signup and view all the answers

    The concept of supply is considered the cornerstone of which legal framework?

    <p>Central Goods and Services Tax Act</p> Signup and view all the answers

    Under the GST framework, a trust is classified as which type of person?

    <p>An artificial juridical person</p> Signup and view all the answers

    Which of the following entities is categorized as a body corporate under GST laws?

    <p>A limited liability company</p> Signup and view all the answers

    Which section of the CGST Act contains the provisions related to the meaning and scope of supply?

    <p>Section 7</p> Signup and view all the answers

    Which of the following is TRUE about the GST laws of the States and Union Territories?

    <p>They are largely based on the CGST Act, 2017</p> Signup and view all the answers

    What characterizes a barter transaction?

    Signup and view all the answers

    Which of the following is included as a supply according to the provided definitions?

    <p>Importation of services for a consideration</p> Signup and view all the answers

    What is one condition that transactions must meet to be treated as a supply of goods or services according to the parameters listed?

    <p>They must be made for a consideration</p> Signup and view all the answers

    Which of the following activities is considered not a supply of goods or services?

    <p>A public authority providing a service without charge</p> Signup and view all the answers

    According to the definitions, which is true about the scope of supply?

    <p>It includes both goods and services as specified in the CGST and IGST acts</p> Signup and view all the answers

    What role does the Government play according to the provisions of the definitions?

    <p>The Government can specify transactions that are treated as supply of goods or services</p> Signup and view all the answers

    What does clause (a) of sub-section (1) primarily illustrate?

    <p>Forms of supply that include various transactions</p> Signup and view all the answers

    Which of the following is a characteristic of transactions that can be considered a supply?

    <p>They must involve provision of goods or services at a fee</p> Signup and view all the answers

    Which aspect of the definition indicates that the list of supplies is not finite?

    <p>The wording 'such as' indicating examples rather than a complete list</p> Signup and view all the answers

    Which of the following statements is true regarding the supply of goods by the principal on behalf of the supplier?

    <p>Interest charged for delayed payment is included in the value of supply.</p> Signup and view all the answers

    Which service is specifically exempt from supply under Entry 27 of Notification No. 12/2017 CT(R)?

    <p>Interest involved in credit card services</p> Signup and view all the answers

    How does temporary short-term transaction based credit provided by DCA affect the nature of supply?

    <p>It is subsumed in the supply of goods.</p> Signup and view all the answers

    What type of services does the DCA provide to the supplier or recipient?

    <p>Agency services</p> Signup and view all the answers

    When is an interest or discount considered part of exempt supply?

    <p>When represented by deposits, loans, or advances</p> Signup and view all the answers

    Which of the following scenarios does NOT involve the DCA acting as an agent?

    <p>Delivering goods directly to the buyer</p> Signup and view all the answers

    What happens to the consideration that is represented by way of interest when extending loans?

    <p>It is exempt from being classified as supply.</p> Signup and view all the answers

    Which of the following can NOT be considered a supply by the DCA?

    <p>Goods provided without consideration</p> Signup and view all the answers

    What does section 7(1)(aa) state about members of an association and the activities between them?

    <p>They are deemed to be two separate persons.</p> Signup and view all the answers

    Which legal principle does the explanation to clause (aa) in section 7(1) override?

    <p>Doctrine of mutuality.</p> Signup and view all the answers

    In what way does section 7(1A) classify certain activities or transactions?

    <p>As either supply of goods or supply of services.</p> Signup and view all the answers

    What issue did the classification in Schedule II to the CGST Act help to resolve?

    <p>Ambiguities in tax liabilities under previous laws.</p> Signup and view all the answers

    What happens to a Resident Welfare Association that supplies goods to its members according to section 7(1)(aa)?

    <p>The supply is regarded as taking place between two entities.</p> Signup and view all the answers

    How were restaurant services taxed under the earlier tax regime?

    <p>Both service tax and VAT were applicable.</p> Signup and view all the answers

    What does the term 'supply' encompass according to section 7(1)(aa)?

    <p>Any exchange of goods or services for value.</p> Signup and view all the answers

    What does section 7(1) allow associations and clubs to do in their transactions with members?

    <p>Charge members for goods and services as separate entities.</p> Signup and view all the answers

    What distinguishes barter transactions from exchange transactions?

    <p>Barter involves only goods or services exchanged.</p> Signup and view all the answers

    In the context provided, how is a 'licence' defined?

    <p>A legal agreement granting permission to engage in a lawful activity.</p> Signup and view all the answers

    Which scenario exemplifies an exchange transaction?

    <p>A buyer pays <code>4,00,000 cash and an old car worth</code> 1,00,000 for a new car.</p> Signup and view all the answers

    What does the term 'disposal' refer to in the provided definitions?

    <p>The act of giving away or selling an item.</p> Signup and view all the answers

    Which of the following best describes 'rental' as per the definitions mentioned?

    <p>An arrangement to pay for the use of an item.</p> Signup and view all the answers

    What is a key characteristic of barter transactions as mentioned?

    <p>They constitute both supply and consideration.</p> Signup and view all the answers

    Which transaction would NOT qualify as an example of barter?

    <p>A customer buys a product and pays with a credit card.</p> Signup and view all the answers

    How is 'lease' defined based on the provided content?

    <p>A legal deal to use an item with a fixed repayment term.</p> Signup and view all the answers

    Study Notes

    Learning Outcomes

    • Comprehend the taxable event under GST
    • Analyze the taxable event—Supply—its meaning and scope
    • Identify the transactions that will amount to supply, even without any consideration
    • Identify the transactions that will be neither the supply of goods nor the supply of services
    • Classify specified transactions either as supply of goods or as supply of services
    • Explain composite and mixed supplies and their taxability under GST

    Chapter Overview

    • Meaning of supply—Supply for a consideration in course/ furtherance of business
    • Activities/transactions between a person, other than an individual, and its members/constituents for consideration
    • Import of services for a consideration whether or not in course/ furtherance of business treated as supply
    • Activities treated as supply even made without consideration
    • Activities classified as either Supply of goods or Supply of services
    • Activities treated as neither supply of goods nor supply of services
    • Concept of Composite and Mixed Supplies

    Introduction

    • A taxable event is any transaction or occurrence that results in a tax consequence
    • Before levying any tax, a taxable event needs to be ascertained
    • It is the foundation stone of any taxation system; it determines the point at which tax would be levied
    • Earlier indirect tax regime was prone to interpretations, leading to litigation.

    Relevant Definitions

    • Goods: Every kind of movable property other than money and securities, but includes actionable claims, growing crops, grass, and things attached to or forming part of the land agreed to be severed before supply or under a contract of supply (Section 2(52))
    • Services: Anything other than goods, money, and securities, but includes activities relating to the use of money or its conversion by cash or another form, currency or denomination. (Section 2(102))
    • Principal: A person on whose behalf an agent carries on the business of supply or receipt of goods or services or both (Section 2(88))

    Competent authority, Family, Government, Local authority

    • Competent authority: means such authority as may be notified by the Government (Section 2(29))
    • Family: the spouse and children, parents, grand-parents, brothers, and sisters (wholly or mainly dependent) (Section 2(49))
    • Government: means the Central Government (Section 2(53))
    • Local authority: a Panchayat, Municipality, Municipal Committee, Zilla Parishad, District Board, Cantonment Board, Regional Council, and Development Board (as defined in various statutes)

    Supply under GST

    • The GST laws resolve issues by laying down one comprehensive taxable event, known as "Supply".
    • GST taxes the entire value of supply, unlike the earlier indirect taxes which were charged independently on manufacture/sale or provision of services
    • Taxable supply: Means a supply of goods or services which is leviable to tax under this Act (Section 2(108)).
    • Taxable territory: The territory to which the provisions of this Act apply (Section 2(109))
    • Supplier: The person supplying goods or services (Section 2(105)).
    • Recipient: of supply of goods and/or services who is liable to pay the consideration, the person to whom the goods are delivered/available, or to whom possession/use of the goods is given/available.

    Concept of Supply

    • The concept of 'supply' is the keystone of the GST architecture
    • The provisions relating to the meaning and scope of supply are contained in Chapter III of the CGST Act.

    Statutory Provisions

    • Section 7: Meaning and scope of supply, which includes all forms of supply of goods or services

    Supply under GST

    • Supply should be of goods or services
    • Should be made for a consideration
    • Should be made in course or furtherance of business
    • exceptions

    Concept of Supply and Scope of Supply

    • The definition of Supply is inclusive, not exhaustive, illustrated by "such as"
    • Provisions of Scope of Supply under CGST Act are applicable to IGST Act too.

    Parameters of Supply

    • Supply of goods, in-course or furtherance of business
    • Supply for a consideration
    • Detail and explanation

    Supply of Goods or Services for Consideration in Course or Furtherance of Business

    • The first part of section 7 includes all forms of supply of goods or services or both
    • Supply should be for a specific consideration
    • Should be in the course or furtherance of business

    Forms of Supply

    • The list of forms of supply in section 7(1)(a) is illustrative, not exhaustive

    Meaning of Sale, Transfer, Barter, Exchange, Licence, Rental, Lease or Disposal.

    License, Lease, Rental and Disposal

    Consideration

    • Consideration is payment; it need not be in money or kind.
    • Any subsidy by central/state government is not considered as consideration

    Activities without Consideration—Deemed Supply

    Permanent Transfer/Disposal of Business Assets

    Supply between principal and agent

    Import of services

    Activities or transactions to be treated as Supply of goods or Supply of services

    Non-supplies under GST.

    Composite and Mixed Supplies

    • Composite supply: Comprises two or more taxable supplies of goods or services, are naturally bundled in ordinary business, with one being the principal supply.
    • Mixed supply: Comprises two or more independent supplies of goods or services, not naturally bundled, considered as a supply of the supply that attracts the highest rate of tax.

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    Related Documents

    Supply Under GST 2.pdf

    Description

    Test your knowledge on the definitions related to supply and business under the Goods and Services Tax (GST). This quiz covers key concepts such as what qualifies as a supply, activities in furtherance of business, and personal capacity supplies. Understand the nuances of GST and refine your expertise in this area.

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