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Supply of Goods Under GST - B Com PDF Download
Needed a Document for concept of supply under gst? Related: Public Finance - Notes & Videos
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Once a person is registered under GST, then any activity carried out by him i.e. sales, service, job work, manufacturing etc. would fall under the definition of supply unless specifically excluded under the law.
There would only be one activity which would be relevant for the purpose of levy of tax i.e. supply. A person would have to charge tax on supply of goods or services or both unless specifically exempted from levy of tax.
What is Time of Supply of Goods Under GST?
Once the activity is covered under the definition of supply then the next stage is to determine time of supply. The time of supply crystallizes when tax would become due to the government.
Under earlier laws, tax was due at the time of transfer of property in goods under VAT, Manufacturing stage under Excise, generally at the time of provision of service under service tax etc.
The entire concept has undergone sea change and a set of rules have been prescribed as to when the tax would be due under GST in respect of supply of goods or services or both irrespective of the time when manufacturing has taken place or property in the goods has been transferred or services have been provided.
How GST would work?
A being the “Manufacturer” of soap, sold the soap for Rs.100 to B the “Wholesaler”. A used services of E for manufacturing of goods of Rs.20 and paid tax of Rs.1.
B sold the soap for Rs.150 to C who was the “Retailer”.
C sold the soap to D being “Consumer” for Rs.200.
If in this case tax rate in GST is 5%, then,
| Transaction | Particulars | Transaction Value | Tax Rate | Tax | Input Tax Credit | Tax Payable |
| Service | E to A | 20 | 5% | 1.00 | 0.00 | 1.00 |
| Sale | A to B | 100 | 5% | 5.00 | 1.00 | 4.00 |
| Sale | B to C | 150 | 5% | 7.50 | 5.00 | 2.50 |
| Sale | C to D | 200 | 5% | 10.00 | 7.50 | 2.50 |
- a) E would be collecting Rs.1 i.e. 5% of Rs.20 on services provided to A. E would be depositing Rs.1 to the Government. For the sake of simplicity, it has been assumed that E does not have any claim of Input Tax Credit against the output tax liability of Rs.1.
- b) A would be collecting Rs.5 i.e. 5% of Rs.100 on sales made to B. A would be depositing Rs.4 to the Government after taking credit of the tax of Rs.1 paid to E. Credit of taxes paid on service is allowed to be set off in GST. However, if it would have been earlier taxes, then service tax was not allowed as set off against Sales Tax.
- c) B would be collecting Rs.7.5 i.e. 5% of Rs.150 on sales made to C and he would be depositing Rs.2.5 to the Government after deducting Rs.5 paid on Purchases made from A out of Rs.7.5.
- d) C would be collecting Rs.10 i.e. 5% of Rs.200 on sales made to D & he would be depositing Rs.2.5 to the Government after deducting Rs.7.5 out of Rs.10 paid on purchases made from B.
- Therefore, in GST, total revenue collected from the entire chain of transaction would be Rs.10 at a tax rate of 5% after allowing set-off of entire taxes paid earlier in the supply chain and not having any cascading effect of levy of tax on tax.
FAQs on Supply of Goods Under GST - B Com
| 1. What is the concept of supply of goods under GST? |  |
Ans. Under the Goods and Services Tax (GST) regime, supply of goods refers to the transfer of ownership or the right to use goods in the course of business. It includes all forms of supply such as sale, transfer, barter, exchange, license, rental, lease, or disposal made for consideration.
| 2. Are all goods subject to GST in India? | |
Ans. Yes, all goods, except those specifically exempted, are subject to GST in India. The GST rates vary depending on the type of goods. Some essential goods like food grains, books, and healthcare items may be exempt or have lower tax rates.
| 3. How is the value of goods determined under GST? | |
Ans. The value of goods under GST is determined based on the transaction value, i.e., the price actually paid or payable for the goods. It includes any additional costs incurred, such as packaging, labeling, transportation, and insurance. If the transaction value cannot be determined, certain predefined methods are used to calculate the value.
| 4. Can input tax credit be claimed on goods supplied under GST? | |
Ans. Yes, input tax credit can be claimed on goods supplied under GST. Input tax credit allows businesses to reduce the tax liability on their output supplies by offsetting the taxes paid on their input supplies. However, there are certain conditions and restrictions that need to be met to claim input tax credit.
| 5. What are the compliance requirements for the supply of goods under GST? | |
Ans. The compliance requirements for the supply of goods under GST include obtaining a GST registration, issuing tax invoices with specific details, maintaining proper records of inward and outward supplies, filing regular GST returns, and paying the applicable taxes within the prescribed due dates. Failure to comply with these requirements may attract penalties and legal consequences.
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Nov 15, 2024 Last updated |
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