What Does Supply Mean Under GST

What does supply mean under GST?
In the GST system, a taxable event is called a Supply. For an event to be

considered as a supply by the government, it should have the following
characteristics.
Supply of goods or services
When a transaction takes place, if there is a transfer of title of goods, then it

is considered as supply of goods. For example, when you buy a pen from a
retailer, the ownership of the pen is transferred from the retailer to you, the
customer.
When there is a transfer of right in goods without transfer of title, it is

considered as supply of service. For example, if you are availing
transportation services, then the right of using the service is transferred to
you, while the ownership still stays with the transportation company.
Supply should be taxable
Supply of goods or services can either be taxable or tax-exempt. Taxable

supplies are goods and services that attract GST. Tax-exempt supplies
include supply of goods or services that belong to a specific category
mentioned in the GST Act.
Supply should be made by a taxable person
A taxable person is defined as a person who is registered under the GST,

or is a liable to register, or a person who has voluntarily registered.
Supply between two non-taxable people will not be considered as supply
under GST.
If a person supplies goods or services in different states or has multiple

business verticals, then they are required to register separately for each
state or vertical. Each of these registered entities will be considered as a
taxable person.
Supply should be made within a taxable territory
Taxable territory means any place in India except the State of Jammu and
Kashmir.
Supply should be made in exchange for consideration
Consideration can be defined as a barter of goods or services, or payment

made for a supply in money, or in kind. A prepayment or deposit toward a
supply is also as accepted as a consideration by the government.
According to CGST Act, the following activities that will be treated as

supply even if it is made without consideration.
 When a business permanently transfers or disposes its assets for which

input tax credits have been availed.
 Supply made between two related or separate persons for business
purposes.
 Supply of goods by an agent on behalf of the supplier or supply received by
an agent on behalf of a customer.
 When a taxable person imports services from a related person, or from his
or her own business outside of India for business purposes.
Supply should be made in the course of business or in the
interest of growing a business
GST is applicable only on business transactions. Hence, for a transaction

to be a considered as supply under GST, it has to be made for business
purposes.
If supplies are made for personal purposes, it will not be considered as a

supply under GST.
What are the three components of supply

under GST?
A supply under GST has three attributes that are used to calculate the tax
owed for that transaction: place, value, and time.
 Place of Supply - This component determines whether a transaction is an

intra-state supply, an inter-state supply, or an external trade, which
determines the type of GST that will be associated with it.
 Value of Supply - This component decides the taxable value of supply
made, and thus the amount of tax that needs to be paid for it.
 Time of Supply - This component determines when the associated taxes
and GST returns are due.
Types of supply under GST

Under the GST, supply of goods and/or services can be classified into two
major categories - Taxable supplies and Non-taxable supplies. These are
further classified into different types based on the nature of supply made.
 Taxable Supplies - These refer to supply of goods and/or services that are
taxable under GST. Registered taxpayers can claim refunds on tax paid
during purchases (in other words, they are eligible for ITC).
o Regular taxable supplies - Whenever you supply an item or service which
attract a GST rate greater than 0% within India, it becomes a
regular taxable supply.
o Nil-rated supplies - Whenever you supply goods which attract 0% GST by
default, such supplies are known as nil rated supplies.
o Zero-rated supplies - Whenever you make exports, supplies to a SEZ unit
or deemed exports, the GST associated with the items or services
involved becomes 0 even though the same would attract a GST rate
greater than 0% when sold within India. Such supplies are deemed as
zero rated supplies
 Non Taxable Supplies
o Exempt Supplies - The supply of exempt goods or services do not attract
GST even though they are within the purview of GST. That said, the
registered taxpayer cannot claim ITC on inputs used for making such
supplies.
o Non-GST supplies - This refers to supply of items which are outside the
purview of the GST law.
Note: The following transactions must neither be considered as a supply of
goods nor services: Supply of goods from one non-taxable territory to
another without entering India. Supply of warehoused goods to a buyer
before they pass clearance for home consumption. Supply of goods related
to high sea sales.
Supplies where there are more than one

goods and/or services involved
Any supply of goods and/or services made under GST will be classified as
either wholly goods or wholly services depending on the primary item or
service supplied according to Schedule II of the GST law. This also applies
to those cases where the supply made involves both goods and services.
While goods and services can be supplied individually, one can also supply
them as a bundle or a set using one of the following methods of supply:
 If the goods and services supplied together are a natural bundle (wherever
it makes more sense to provide them together than to sell them
individually), then it is known as a composite supply.
 If the goods and services supplied together are not naturally bundled
together (they are not interdependent and can also be sold separately),
then such a supply is known as mixed supply.

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What does supply mean under GST?

In the GST system, a taxable event is called a Supply. For an event to be

Supply of goods or services

When a transaction takes place, if there is a transfer of title of goods, then it

When there is a transfer of right in goods without transfer of title, it is

Supply should be taxable

Supply of goods or services can either be taxable or tax-exempt. Taxable

Supply should be made by a taxable person

A taxable person is defined as a person who is registered under the GST,

If a person supplies goods or services in different states or has multiple

Supply should be made within a taxable territory

Supply should be made in exchange for consideration

Consideration can be defined as a barter of goods or services, or payment

According to CGST Act, the following activities that will be treated as

 When a business permanently transfers or disposes its assets for which

GST is applicable only on business transactions. Hence, for a transaction

If supplies are made for personal purposes, it will not be considered as a

What are the three components of supply

 Place of Supply - This component determines whether a transaction is an

Types of supply under GST

Supplies where there are more than one

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