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SCOPE OF SUPPLY SERIES – PART 11
Last week we have gone-through the several topic SCHEDULE II services under GST. Read Part 10 of Scope of Supply under GST, in the following link:
In this article we shall see the following entries which are to be treated as supply of service in detail:
Under this scope, following activities are included:
For example Refundable security deposit is not taxable, however if deposit is forfeited then it would be taxable.
Non-competent fee under Income tax act has been specifically included as business income. The same is also liable to GST.
If an employee leave job without giving required notice, Notice pay is recovered from employee. On such amount GST has to be charged and paid by the employer. This is actually supply of services of tolerating an act or a situation provided by employer to employee.
Transfer of Right to use goods for cash, deferred payment or valuable consideration is considered supply of services under Schedule II.
There are two case laws involved under this entry
The issue involved in this case is whether the placement of specified medical instruments to un-related customers like hospitals, labs etc, for their use without any consideration, for a specific period constitute supply.
The Hon’ble AAR of Kerala vides Advance Ruling Order No. KER/ 15 /2018 dated September 26, 2018 stated that the supply of instrument and reagent is naturally bundled and becomes a composite supply. As supply of instrument is a onetime activity and supply of reagent is a continuous activity, till the termination of the agreement. This transaction being a composite supply, the applicable tax rate is the tax rate of instrument, which is the principal supply.
The placement of specified medical instruments to unrelated customers like hospitals, labs etc, for their use without any consideration, against an agreement containing minimum purchase obligation of products like reagents, calibrators, disposals etc for a specific period constitute composite supply.
The Applicant intends to lease trucks or tankers without operator to goods transport agencies (hereinafter called “GTA”) or any other persons. The Applicant seeks a ruling whether supply of services by way of leasing of goods transport vehicles without operators to GTA would be exempt
The Applicant intends to lease out vehicles like trucks, tankers etc. that are designed to transport goods. The control and possession of the vehicle will be transferred to the lessee, who will engage operator and bear the cost of repair, insurance etc. It is, therefore, not classifiable under SAC 9966, which is restricted to rental services of transport vehicles with operator
The service is classifiable under SAC 997311 as leasing or rental services concerning transport equipment without operator. It amounts to the transfer of the right to use the goods
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MANIMARAN KATHIRESAN ( ON BEHALF OF GST INDIA DAILY TEAM)
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