Provisions under Section 7 of the Central Goods and Services Tax (CGST) Act, 2017 relating to “Scope of Supply”, are as under:
Section 7 of CGST Act 2017: Scope of Supply (CHAPTER III LEVY AND COLLECTION OF TAX)
(1) For the purposes of this Act, the expression “supply” includes–
(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;
(b) import of services for a consideration whether or not in the course or furtherance of business; and
(c) the activities specified in Schedule I, made or agreed to be made without a consideration.
(1A) where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II.
(2) Notwithstanding anything contained in sub-section (1),–
(a) activities or transactions specified in Schedule III; or
(b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council,
shall be treated neither as a supply of goods nor a supply of services.
(3) Subject to the provisions of sub-sections (1), (1A) and (2), the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as-
(a) a supply of goods and not as a supply of services; or
(b) a supply of services and not as a supply of goods.
1. CBEC notifies 1st July 2017 as the Commencement date for Section 7 of the CGST Act 2017, vide Notification 9/2017 Central Tax.
2. Amendments made in 7 of the CGST Act 2017, vide Section 3 of the CGST (Amendment) Act, 2018: GOI Notification dt. 30 Aug. 2018, w.e.f. 1st July 2017:
a) the word ‘and’ inserted after the text ‘or furtherance of business’ in clause (b) of Section 7(1);
b) the word ‘and’ omitted after the text ‘a consideration’ in clause (c) of Section 7(1);
c) Clause (d) of Section 7(1) omitted;
d) Section 7(1A) inserted; and
e) in Section 7(3), the text ‘sub-sections (1) and (2)’ substituted with the text ‘sub-sections (1), (1A) and (2)’.
3. With regard to clause (b) of sub-section (2), CBIC has issued Notification 14/2017 Central Tax Rate dt. 28 June 2017 and Notification 16/2018 Central Tax Rate dt. 26 July 2018 for notified activities or transactions which shall not be treated as a supply of goods/ services under CGST Act.
Govt. has notified the CGST Act, 2017 on 12th April, 2017, which has subsequently been amended through the CGST (Extension to J&K) Act 2017, Finance Act 2018, CGST Amendment Act 2018, Finance (No. 2) Act 2019, Finance Act 2020, Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance 2020. Further, CBEC/ CBIC has also issued various Notifications from time to time, relating to the commencement date of various Sections/ Provisions in the respective CGST/ Amendment Acts, wherever required.
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