Third Schedule (III) to CGST Act 2017: Activities/ Transactions which shall not be treated as Supply of Goods or Services

Provisions under the ‘Third Schedule (III)’ to the CGST Act 2017 regarding “Activities/ Transactions which shall not be treated as Supply of Goods or Services”, are as under:

Schedule III to CGST Act 2017: Activities or Transactions which shall be treated neither as a Supply of Goods nor a Supply of Services (See Section 7)

1. Services by an employee to the employer in the course of or in relation to his employment.

2. Services by any court or Tribunal established under any law for the time being in force.

3. (a) the functions performed by the Members of Parliament, Members of State Legislature, Members of Panchayats, Members of Municipalities and Members of other local authorities;

(b) the duties performed by any person who holds any post in pursuance of the provisions of the Constitution in that capacity; or

(c) the duties performed by any person as a Chairperson or a Member or a Director in a body established by the Central Government or a State Government or local authority and who is not deemed as an employee before the commencement of this clause.

4. Services of funeral, burial, crematorium or mortuary including transportation of the deceased.

5. Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building.

6. Actionable claims, other than lottery, betting and gambling.

7. Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India.

8. (a) Supply of warehoused goods to any person before clearance for home consumption; (b) Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption.

Explanation 1: For the purposes of paragraph 2, the term “court” includes District Court, High Court and Supreme Court.

Explanation 2: For the purposes of paragraph 8, the expression “warehoused goods” shall have the same meaning as assigned to it in the Customs Act, 1962.

SCHEDULES TO CGST ACT 2017
First Schedule: Activities to be treated as Supply even if made Without Consideration
Second Schedule: Activities to be treated as Supply of Goods or Services
Third Schedule: Activities/ Transactions which shall not be treated as Supply of Goods or Services

Amendments History:

1. Paragraphs 7 & 8 inserted vide CGST (Amendment) Act, 2018: GOI Notification dt. 30 Aug. 2018, followed with CBIC Notification on commencement date of 1st Feb. 2019 vide Notification 2/2019 Central Tax dt. 29 Jan. 2019Thus certain supplies in respect of Merchant trading, Sale of goods in customs bonded warehouse and High Seas sales inserted in Schedule.

2. Explanation 2 inserted vide CGST (Amendment) Act, 2018: GOI Notification dt. 30 Aug. 2018, followed with CBIC Notification on commencement date of 1st Feb. 2019 vide Notification 2/2019 Central Tax dt. 29 Jan. 2019.

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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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