Treatment of certain transactions as supply of goods or as supply of services:
Schedule II of the Model GST Law lists certain specified transactions as a supply of goods or as a supply of services. Under the Schedule, transfer of title in goods with immediate effect or with effect from a future date under an agreement is considered as supply of goods. Transfer of goods or of rights in goods without the transfer of title is treated as supply of services. Any lean, tenancy, easement, license to occupy land, or lease or letting out a building for business or commerce, treatment or process applied to another person’s goods (job work) is treated as supply of services.
Where goods forming part of the assets of the business are transferred or disposed of by a person who no longer carries on the business (ceases to be a taxable person), such transfer/disposal is a supply of goods. When the goods held or used for the purposes of the business are put to any private or personal use other than for the purpose of business, whether or not for consideration, the usage or making available of such goods for non-business use is a supply of services. The Schedule II also provides that, where any goods forming part of the business assets of a taxable person are sold by any other person who has the power to do so to recover any debt owed by the taxable person, the goods shall be deemed to be the supplies by the taxable person in the course of furtherance of his business.
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, 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.
The Schedule II further provides that (a) renting of immovable property, (b) construction of building/civil structure, (c) temporary transfer or permitting use or enjoyment of intellectual property right, (d) development, design, programming and certain other activities relating to information technology software, (e) agreeing to or refrain from an act or to tolerate an act, (f) works contract, (g) transfer of the right to use any goods, (h) catering services, as a supply of services.