Introduction of Supply :
Article 366(12A) of the proposed 122nd Constitutional Amendment Bill, 2014 defines the Goods and Services tax (GST) as a tax on supply of goods or services or both, except supply of alcoholic liquor for human consumption. While Article 246A provide simultaneous powers to both the Central and State governments to levy the goods and services tax on intra-state supply, the Parliament alone shall have exclusive power to make laws with respect to levy of goods and services tax on inter-state supply. Article 269A empowers the Parliament to formulate the principles for determining the place of supply and when a supply of goods/services takes place in the course of inter-state trade or commerce. The term ‘supply’ is, however, not defined in the Constitution.
The concept of ‘supply’ is the key stone of the proposed GST architecture. GST is a multi-stage tax levied on supply of goods and / or services, collected at each stage of the production and distribution, in proportion to the value added by each taxable person in the chain of supply. In the GST regime, the entire value of supply of goods and / or services is proposed to be taxed in an integrated manner, unlike the existing indirect taxes, which are charged independently either on the manufacture or sale of goods, or on the provisions of services. This paper explains the meaning and scope of supply, the various types of supply, the time when the GST is chargeable (time of supply), and the valuation of supply as provided in the Model GST Law.