Concept of supply is the foundation in GST architecture. Under pre GST regime taxable event is most litigated issue as it is difficult to analyze whether a particular process amounted to manufacture or not , whether a sale is predetermined , whether a particular transaction is sale of goods or rendering of services etc. But with the introduction of GST all taxable event namely manufacture, sale, purchase come under one roof i.e. “Supply".
As per section 7 of CGST Act, "supply” includes 
All forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business.
The activities made or agreed to be made without a consideration to be treated as supply specified in Schedule I
The activities to be treated as supply of goods or supply of services as referred to in Schedule II
The activities or transaction specified in schedule III basically transaction or activities that are neither to be treated as supply of goods or services.

From the definition it is clear that the term supply doesn’t defines itself but starts with inclusive terms that gives wider scope and words “such as” makes it a subjective definition which has following parameters :-
1 Supply must be of goods or services anything other than that not considered as supply.
2 Supply should be made for a consideration and in course of furtherance of business.
3 Supply should be made by a taxable person and within a taxable territory.

                                                                        SCHEDULE I
It contains the list of Transaction or activities which are made without consideration are treated as supply.
a) Permanent transfer or disposal of asset on which ITC is claimed is treated as supply.
       Key Consideration- Transfer of Asset by a company to NGO at FOC should be treated as Supply.

b) Supply of goods between related person or distinct person.
c) Supply between Principal and agent.
     Expert’s View- Here Supply refers to supply of goods, Supply of services between principal & agent must include consideration to qualify as supply.
  Further Agent must have the authority to pass or receive the title of goods on behalf of principal to fall within the ambit of Schedule-I.

d) Import of services 
With consideration- Treated as supply whether it is in course of furtherance of business or not
Without consideration- Treated as supply only when taken from related or distinct person in course of furtherance of business.

                                                      SCHEDULE II
It contains the list of activities or transaction which shall be classified as supply of service or supply of goods to mitigate the ambiguities. But it contains certain activities which require Due-Diligence from taxable person.
1 Applicability of GST on Liquidated Damages i.e. charges recovered from   supplier for non- fulfillment of contact attract GST (Supply of Services).

2 Notice pay Recovered from employee for leaving job before agreed period is liable for GST (Supply of Services)
3 Transfer of “Tenancy Right”(Pagadi) is covered under the scope of supply and taxable per-se (supply of Services). However, renting of residential space for use as a residence is exempt 

                          SCHEDULE-III   NON-SUPPLIES UNDER GST  
    Following activities are outside the ambit of GST 
    1 Service by employee to employer in the course of employment.
            EXCEPTION- Amount paid by employer to employee for forbearance to act.
                                   Principal-to-principal basis services.
   2 Services by any Court or any tribunal established under any law.
    3 Functions Provided by Member of Parliament, Member of state legislative, Member of Panchayat/ Muncipalities /Local Bodies and Duties performed by any person who holds any position in pursuance of constitution.

 4 Services of funeral, burial, crematorium or mortuary including transportion of deceased.

5 Actionable claim other than lottery, betting and gambling

6 Sale of Land subject to paragraph 5(b) of schedule II.

7 Transaction that affects your Sales & purchase but not liable for GST
     a) Merchant Trading
      b) High-Sea Sale
      c) Inbound Sale

                                      COMPOSITE & MIXED SUPPLY (SECTION 8)

A composite supply means a supply made by a taxable person to a recipient comprising two or more supplies of goods or services or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply i.e. supply which is predominant and all other supply is ancillary to that supply.

Mixed Supply means two or more supplies of goods or services or any combination thereof made in conjunction with each other by a taxable person which is not naturally bundled.

                                                                               TAX LIABILITY

Composite supply is taxable at the rate at which Principal supply is taxable whereas mixed supply is taxable at the rate at that particular supply which attracts the highest rate of Tax.


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