Introduction OF Supply
While the definition of the word ‘supply’ is inclusive, the legislature has carefully chosen not to use the word/s such as “means”, or “means and includes”, “shall mean”, or “shall include”, etc. A careful consideration of the above explanation would indicate that the draftsman is uncertain about any transaction of supply that could escape the ambit of levy. It is for this reason that despite being exhaustive, the legislature has used the word “includes”.
A plain reading of the definition of the word ‘supply’ contained in Section 7(1) would invite anybody’s attention to the 8 words – sale, transfer, barter, exchange, license, rental, lease or disposal. Look at these 8 words – they are arranged in a descending order. Words 2 to 8 was a subject matter of challenge under the erstwhile State-level VAT Laws. This ambiguity has been done away with in the GST Laws. These 8 words together form a ‘continuum’. The last 7 words complete the absoluteness of the word ‘sale’ and / or supply.
The Model GST Law released in June 2016 had included the meaning of the term ‘Supply’ within the clauses of the definition Section. However, in GST law, the term ‘supply’ is defined by way of a separate and distinct Section, Section 7.One understands that the meaning attributed to the term “Supply” is of very wide amplitude, but yet, an inclusive one. It must be noted that this term is ordinarily attributable to an ‘outward supply’, unless the context so requires that the term refers to an inward supply – say in case of importation of services or in respect of transactions without consideration etc.
The word ‘supply’ could be understood as actual or implied. Implied supplies are governed by the relevant Schedules. The three pillars of a supply would be:
(a) subject – viz. goods, services or goods treated as services. One cannot find an instance in the GST statute where a supply of services is treated as a supply of goods.
(b) place of supply – to identify whether the transaction is an inter-State supply or an intraState supply
(c) the legislature times the supply for goods as well as services.