Definition of ‘deemed sale ‘ to continue :
Interestingly, Article 366(29A) which defines ‘deemed sale of goods’ is being retained (may be to avoid disputes and litigation).
This definition covers transactions of works contract, sale of food article in restaurants, transfer of right to use goods (operating lease), financial lease and hire purchase etc.
There seems no reason to continue this definition as these transactions will get covered under GST. It seems the provision is retained to be on safe side.
Interestingly, some activities which have been defined as deemed sale of goods have been defined as ‘services’ in para 5 of Schedule II of IGST Act.
There is no legal bar in adopting definition in GST Law, which is different from definition contained in the Constitution of India, so long as the levy is within the limits of Constitution of India. However, such differences can be source of confusion and litigation.