Understand the concept of supply in GST, covering essential elements, composite supplies, and key exclusions under Schedules II and III.
The scope of supply under GST, defined by Section 7 of the CGST Act, determines what transactions attract tax — covering sale, transfer, barter, exchange, licence, rental, lease and disposal made for consideration in the course of business. Understanding supply is the foundation of correct GST treatment.
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Frequently Asked Questions
What is ‘supply’ under GST?
Supply includes all forms of sale, transfer, barter, exchange, licence, rental, lease or disposal made for consideration in the course or furtherance of business.
Are transactions without consideration taxable?
Generally no, but Schedule I lists specific activities (like permanent transfer of business assets) treated as supply even without consideration.
What is a composite vs mixed supply?
A composite supply has a natural principal item bundled with others; a mixed supply combines items sold together for a single price without natural bundling — each is taxed differently.
Is a free sample a supply?
Free samples without consideration are usually not a supply, but ITC on such goods may need reversal under Section 17(5).
