Page 12 - Ch2_Supply

as distinct persons.
Ü Section 7(1)© read with Para 2 of schedule I of CGST Act, 2017 states that supply of goods and/or services

between 'distinct persons' as specified in section 25, when made in the course or furtherance of business
shall be treated as supply even if made without consideration.
Ü As per CBIC circular,
Ø The inter-State movement of various modes of conveyance including trucks, carrying goods &/or

passengers or for repairs and maintenance, between ‘distinct persons’ as specified in section 25(4),
not involving further supply of such conveyance, may be treated ‘neither as a supply of goods nor
supply of service’ and therefore, will not be leviable to IGST.
Ø But, the applicable CGST/SGST/IGST shall be leviable on repairs & maintenance done for such

conveyance.
Discussion & conclusion:-
Ü In the given case, inter-State movement of trucks from the workshop of Gagan Engineering Pvt. Ltd.
located in Haryana to its repair centres located in other States is ‘neither a supply of goods nor supply of
services'.

CCP 02.05.15.00

Mr. Veer is a supplier of goods located in Mumbai has appointed Mr. Rudra to procure goods based on a
specification given by him. As the same kind of goods are not available in the area of Mr. Veer, Mr. Rudra
buys the specified goods on his behalf from M/s XYZ Ltd. For this activity, invoice is issued in the name
of principal.
i) Whether it is to be treated as a supply under GST?

ii) Would your answer differ if invoice is issued in name of an agent Mr. Rudra?
Answer:-
Legal Provision:-
Ü Section 7(1)(c) read with Para 3 of Schedule I of CGST Act, 2017 states that supply of goods by an agent

to his principal where the agent undertakes to receive such goods on behalf of the principal, shall be treated
as supply even if made without consideration.
Ü As per CBIC clarification, if invoice for further supply is being issued by agent in his own name, then this
activity is treated as supply under para 3 Schedule 1, otherwise not.

Discussion:-
Ü In the given case, Mr. Rudra (Agent) is appointed just to procure the goods on behalf of Mr. Veer (Principal)
and he is issuing invoice also in name of Mr. Veer (Principal).
Ü He has not involved himself in the supply or receipt of goods in any way.

Ü Hence, Mr. Rudra is not an agent of Mr. Veer for the purpose of para 3 of schedule I.
Conclusion:-
i) No, it is not to be treated as a supply as per para 3 of Schedule I. This is because Mr. Rudra (Agent) is
issuing invoice in name of the Mr. Veer (Principal).
ii) Yes, if invoice is in the name Mr. Rudra (Agent), then this transaction will be treated as supply as per para

3 of Schedule I.

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