EXAMPLE-72
State whether the following
activities are supplies, if yes, whether covered under supply of goods or supply
of services'
(i)
Leasing of land and
residential building for business purpose.
(ii)
Use of business
vehicle for personal use.
(iii)
On
dissolution of partnership how to deal with goods forming part of the assets of
business under GST if not sold by the firm.
(iv)
When business is
transferred as going concern and all assets and liability are transferred.
Answer
|
Nature
of activity |
Taxable under GST |
Supply of goods or Services |
Remarks |
|
(i)
Leasing of
land and residential building for business purpose. Use of business
vehicle for personal use. On dissolution of
partnership how to deal with goods forming part of the assets of business
in GST if not sold by the firm.
When business is
transferred as going concern and all assets and liability are transferred. |
Yes
Yes
Yes
No |
Supply
of Services
Supply
of goods
|
Sec 7(1)(a) 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. Schedule
II paragraph 5(a), provides that renting of immovable property is treated as
supply of service. Whereas, the renting for residential use is covered
under exemption list under GST and, hence no GST on the same Transfer
of any assets is covered under section 7 (scope of supply). Schedule II
paragraph 4(b) specifies that where, by or under the direction of a person
carrying on a business, goods held or used for the purposes of the
business are put to any private use or are used, or made available to any
person for use, for any purpose other than a purpose of the business,
whether or not for a consideration, the usage or making available of such
goods is a supply of services. In view of above provision use of business vehicle for personal use taxable under GST.
Schedule
II specifies that where any person ceases to be a taxable person, any
goods forming part of the assets of any business carried on by him shall
be deemed to be supplied by him in the course or furtherance of his
business immediately before he ceases to be a taxable person, unless' (i)
the business is transferred as a going concern to another person; or (ii) the business is carried on by a personal representative who is deemed to be a taxable person.
According to Schedule II, transfer of business as going concern does not constitute supply, so not liable to GST.
Transferor
for transferring unutilized ITC in their books will transfer the credit
according to Rule 41 of Chapter-V of CGST Rules, 2017. The transferor shall be required to
furnish details of sale, merger, de-merger, amalgamation, lease or transfer
of the business along with the request to transfer the unutilized amount
of ITC in electronic credit ledger in FORM GST ITC-02. The transferee
shall accept on the Common Portal details furnished by transferor and upon
such acceptance the unutilized credit mentioned in FORM GST ITC-02 shall
be credited to his electronic credit ledger. |