Nature Of Supply In GST.

What is Nature Of Supply??

Nature of Supply and Place of supply are two of the most important concepts under GST. Determination of Nature of supply is very important to determine whether a supply is inter-state or intra-state. CGST and SGST will be levied on intra-state supply while inter-state supplies will be charged to IGST.

After the Above segregation one can determine the right taxes on the supply which is as follows:

1. if it is Inter-State Supply —— > Tax – IGST

2. if it is Intra-state Supply in GST which is —— > Tax —CGST and  SGST or UGST

Therefore,  it becomes pertinent to decide whether supplies shall be treated as intra-State supplies or inter-State supplies. Also, this is necessary to determine because it will be a decisive factor for charging correct taxes, i.e. CGST and SGST/UTGST or IGST.

The relevant provisions for determining inter-State and intra-State supplies are governed by Section 7 and Section 8 of the IGST Act.

Section of 7 of IGST Act [Inter-State Supply]

1. Inter-State supply where the location of supplier and place of supply are as under and the supply  shall be treated as Inter-State;

a] supply in different states

b] supply in different union territory

c] supply  in state and union territory

2. supply of goods imported into the territory of India, till it crosses the custom frontier of India.

3. Supply of Goods or service or both ;

• • The supplier is in India and recipient is outside India.
  • Supply to or by SEZ unit or Developer.
  • Supply in the taxable territory, not being an intra-State supply elsewhere in this section.

Section 8 of the IGST Act pertains to intra-State supplies.

Sub-section (1) of Section 8 of the IGST Act deals with the intra-State supply of goods. The said section provides that  supply of goods where the location of the supplier and place of supply of goods are in the same State or same Union territory shall be treated as intra-State supply”, the proviso to above section excludes three supplies from being treated as intra-State supply even if the location of supplier and place of supply are in same State or Union territory, these are:

(i) supply to or by an SEZ developer or unit;

(ii) goods or services imported into India and;

(iii) supplies made to tourist referred in Section 15

Sub-section (2) to Section 8 deals with the intra-State supply of services and it provides that supply of services where the location of the supplier and the place of supply of services are in the same State or same Union territory shall be treated as intra-state supply”.

What is the nature of GST?

The goods and services tax (GST) is a value-added tax levied on most goods and services sold for domestic consumption. The GST is paid by consumers, but it is remitted to the government by the businesses selling the goods and services. In effect, GST provides revenue for the government.

What is supply in GST?

What is the meaning of 'Supply' under GST? Supply is defined to include all forms of supply of goods and/or services 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.

What are the types of supply?

There are five types of supply:

•  Market Supply
•  Short Term Supply
•  Long Term Supply
•  Joint Supply
• Composite Supply