Analysis of section 8: GST under Direct levy

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“There shall be levied a tax called the Central/State Goods and Services Tax (CGST/SGST) on all intra-State supplies of goods and/or services on the value determined under section 15 and at such rates as may be notified by the Central/State Government in this behalf, but not exceeding fourteen percent, on the recommendation of the Council and collected in such manner as may be prescribed.”

Thus, under GST supply of goods and/or services is the event on which levy of liability to GST tax is fixed. Unless there is no supply there is no possibility of being levied. After an event is confirmed to be an act of supply under section 3 of the act, next question arises as to where it is intra state (means supply within the state) or inter state supply (means supply from one state to another state). If supply under question is intra state supply CGST & SGST will be applicable and otherwise IGST will be applicable.

Supply v Consideration of supply:

Case 3: What happen in case of exchange of goods is that supplier of goods services received in consideration of his supplies is either another goods and / or services. For example receipt of gold in exchange of restaurant services. Whether in such cases transaction will be taxable as two different supplies or is taxable only in the hands of mail supplier?

In the above case the transaction of supply of watch from consumer to the restaurant will not be an independent supply as the same is not in the course of business. It is a consideration for a supply made by the restaurant to him. The same will be a taxable supply by the restaurant.