EXAMPLE

State whether the following activities undertaken by ABC Ltd of Gujarat would be liable to GST'

(i)                 Any transfer of right in goods or of undivided share in goods without the transfer of title thereof.

(ii)               Manufacture of herbal cosmetics earlier liable to excise duty.

(iii)             Processing of raw materials. The process is not leviable earlier in excise duty under any Act. But in GST product are covered in 5% tax rate.

(iv)             Any service by employee to employer in the course of employment.  

Answer

Nature of activity

 

Taxable under GST

 

Remarks

 

Any transfer of right in goods or of undivided share in goods without the transfer of title thereof.

 

 

 

 

 

 

Manufacture of herbal cosmetics earlier liable to excise duty.

 

 

 
 

Processing of raw materials. The process was not leviable earlier under excise duty Act. But in GST product are covered undern 5% tax rate.

 

 

Any service by employee to employer in the course of employment.

 

 

 

Yes

 

 

 

 

 

 

 

 

Yes

 

 

 

 


Yes

 

 

 

No

 

Sec 7 of GST Act, supply of goods and/or services covers any activity such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for consideration  and for business.

As per Schedule II, when transfer  takes place only in rights relating to goods like temporary use on  renting etc. or when transfer of  undivided share in goods without the transfer of title thereof, is deemed as supply of services.

On this supply of services same rate of GST and compensation cess is applicable as on supply of similar goods [SCHEDULE OF GST RATES FOR SERVICES AS APPROVED BY GST COUNCIL]
 

All major indirect taxes will be subsumed by GST. Most important of them include Central Excise, Service Tax, VAT, CST.  Concepts of taxable event of manufacture of goods, provision of service and sale of goods are no longer relevant under GST. Supply of goods or services is 'taxable event' in GST. When herbal cosmetic goods supplied is taxable under GST.

 

 


Concept of taxable event of manufacture/processing of goods is no longer relevant. When product is supplied then GST @ rate 5% (given in example ) is liable.

 



 


GST is leviable on supply of goods or services or both. But activities or transactions specified in Schedule III are neither supply of goods nor a supply of services.

Service by employee to employer in the course of employment is specified in the above said Schedule, thus, this service is not liable for GST.