Taxable event in GST :
♦ Supply of goods or services or both is ‘taxable event’ in GST as that event triggers liability to pay GST.
♦ Supply of goods and services for consideration is always taxable.
♦ Supply by taxable person to related person is subj ect to GST even if there is no consideration i.e. no amount is charged.
♦ This will cover transactions between group companies (like deputation of persons, supply of goods on loan basis, common facilities shared by group companies), transactions between branches in different States.
♦ Free gifts to related persons will be subj ect to GST.
♦ Employer and Employee have been defined as ‘related persons’. Hence, GST will be payable on fringe benefits by employer to employees like transport, meals, telephone etc. provided to employees. Gifts upto Rs 50,000 to employees will not be subj ect to GST, but input tax credit will have to be reversed.
♦ Supply between two distinct persons in course of business is subj ect to GST. This will cover inter- state stock transfers, branch transfers, services by Banks and telecom companies in one State to their own branches in another State and the like.
♦ Supply by principal to agent is subj ect to GST. Thus, GST is payable on supplies to C&F Agents. However, commission agent has to pay GST only on his commission as he does not deal with goods or services.
♦ Import of services from related person or from business establishment outside India is subj ect to GST even if there is no consideration. Branch/Head Office in India receiving free services from Head Office/outside India will be subj ect to GST.
♦ Lottery, betting and gambling is subj ect to GST.
♦ Lottery tickets are goods and GST will be payable. GST will also be payable on services relating to betting and gambling.
♦ Some services provided by Government are taxable and mostly will be subj ect to reverse charge.