Analysis of Schedule I of CGST Act

SCHEDULE I

ACTIVITIES TO BE TREATED AS SUPPLY EVEN IF MADE WITHOUT CONSIDERATION

1. Permanent transfer or disposal of business assets where input tax credit has been availed on such

IMPORTANT:

• Transfer of entire business as a going concern cannot be subject to
• Transfer of business asset as whole an independent part is not subject to
• Transfer on slum sale basis is exempt from GST(Innovative Textiles Ltd – AAR Uttarakhand).

2. Supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business:
   Provided that gifts not exceeding fifty thousand rupees in value in a financial year by an employer to an employee shall not be treated as supply of goods or services or both.

IMPORTANT:

• Distinct Person: same PAN but Different GSTIN Examples

1. 1. anil agrotech and shyam agrotech two firms having different GSTIN but under same PAN (i.e. owner is same in both the cases)
   2. Head office supplies to branch/division treated as distinct person (Cummins India AAR – MAHARASTRA)
   3. HO of bank supplied services to its branch with separate GSTIN treated as distinct
   4. Employees of a corporate offices supplies services to other units of the corporate treated as distinct person (Columbia Asia Hospitals (P) Ltd. AAAR – KARNATAKA), However if employees directly supplies services to its corporate then no taxability because as per schedule III treated as neither supply of goods nor service)
   5. Shyam Entity registered in india supplies services to its other entity registered in foreign serin ltd. is exempt (Notification No. 9/2017 dated 28-06-2017)
   6. Takko Holding GMBH a foreign based company has a branch office at india but that branch office does not provide directly/ indirectly any consultancy or services in india, Received only salary and reimbursement expenses from its head office hence not liable for registration under GST, and also head office is also not liable for registration under (Takko Holding GMBH – AAR – TAMIL NADU)
   7. INDIGO AIRLINES (DELHI) transfer aircraft engines, parts and accessories to its branch at rajasthan will be subject to (Distinct person) and also in this case delhi H.O. can take ITC on its material for paying out on such transfer although normally not eligible take ITC.(Circular No. 16/16/2017 Dated 15-11-2017)

• SUPPLY TO RELATED PERSON: GST shall be charged although no
• FREE SAMPLE: to Related person GST Charged and ITC also available but for unrelated person no GST and No
• FRINGE BENEFITS TO EMPLOYEES: Benefits due to employee employer relation ship hence no GST shall be

3. Supply of goods—

• by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal; or
• by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal

EXPLANATIONS :

• Commission agent of agriculture produce: agriculturist is not a taxable person and also commission agent is not a registered person (due to his commission turnover) hence now also commission agent is not required to register under
• Del Credere Agent: Same concept as of commission agent only difference is that del credere agent is providing guarantee of payment to principal in case recipient fails to pay the

IMPORTANT: Supply of goods to agent for further sale by auction is covered under SCHEDULE I of CGST Act. Hence treated as SUPPLY. (Tata Coffee Ltd. AAAR – KARNATAKA)

IMPORTANT: Donation or grant without any condition is not subject to GST but if condition is attached with donation or grant then it will be Subject to GST. Eg. For giving donation if any one promoting himself then that will also considered as advertisement hence considered as consideration hence subject to GST.

4. Import of services by a [person] (Taxable person removed 01/02/2019) from a related person or from any of his other establishments outside India, in the course or furtherance of

Conclusion : On the Basis of Above Discussion we can say that all the activities or transactions covered in above schedule will be treated as supply of goods or services whether there will be any consideration or without consideration.