Page 12 - CA Final GST

Badlani Classes

for its personal use. It constitutes Supply of Service.

9- 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,
(SOG) unless—
a- the business is transferred as a going concern to another person; or
b- the business is carried on by a personal representative who is deemed to be a taxable
person.
Illustration1: X Ltd incurring losses and decided to close down its business and gets de-
registration. Now it cease to be a taxable person. In that situation all business assets in its factory
shall be deemed to be supply of goods immediately before it cease to be a taxable person and GST
would be leviable.

10- temporary transfer or permitting the use or enjoyment of any intellectual property
right (IPR); (SOS)
Note: Copyright, Patent, Trademark, Design etc
Note: This para covers only temporary transfers and not to permanent transfers.
Note: Definition of services u/s 2(88) clearly states that services includes intangible properties.
While definition of goods clearly excludes intangible property.

11- agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to
do an act (SOS)
a- Activity of agreeing to the obligation to refrain from an act : It means any act, which
binds a person for not doing a particular act in the given circumstances.
Example: Non compete fee for not doing a particular business or not to practice a
particular profession.
b- Activity of agreeing to the obligation to tolerate an act or a situation: It means to
accept the occurrence or existence of an act or a particular thing, which is imposed by a
condition or circumstances in a contract, agreement or any other document which is
legally enforceable by law.
Example: Penalty on early termination of agreement, Late delivery charges etc.
c- Obligation to do an act: as per agreement, contract which is required under any law.

SCHEDULE III
ACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED NEITHER AS A
SUPPLY OF GOODS NOR A SUPPLY OF SERVICES
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 Page11
is not deemed as an employee before the commencement of this clause.

Central Goods & Services Tax Act, 2017