Page 15 - Ch2_Supply

Ü In case any or both of the above two conditions is/are not satisfied, the import of services without
consideration shall not be deemed as supply.

CCP 02.06.19.00
Examine whether the activity of import of service in the following independent cases would amount to
supply under section 7:

1) Miss Shriniti Kaushik received interior decoration services for her residence located at Bandra,
Mumbai from Mr. Racheal of Sydney (Australia). The amount paid for the said service is 5,000
Australian dollar.
2) Miss Shriniti Kaushik received interior decoration services for her residence located at Bandra,

Mumbai from her brother, Mr. Varun residing in Sydney (Australia) [wholly dependent on Miss
Shriniti]. Further, Miss Shriniti did not pay any consideration for the said service.
3) Will your answer change if in the above case, if Miss Shriniti has taken interior decoration services
with regard to her business premises and not her residence? (Study Mat)
Answer :-

Legal Provision:
Ü As per section 7(1)(b) of CGST Act, Supply includes import of services for a consideration whether or not
it is in the course or furtherance of business.

Ü Section 7(1)(c) read with Para 4 of Schedule I of CGST Act, states that if services are imported by a
person from a related person located outside India without consideration & that too in the course or
furtherance of business, then it is treated as supply.
Ü Explanation to section 15 states that members of the same family are deemed to be "related persons".
Ü Further, as per section 2(49), brother is treated member of same family only when he is wholly or mainly

dependent on the said person.
Discussion & Conclusion:

1) In the given case, although the import of service for consideration by Miss. Shriniti Kaushik is not in
course or furtherance of business, it would be treated as supply.
2) Ü In the given case, Miss Shriniti Kaushik has received interior decoration services from her
brother.
Ü Miss Shriniti and her brother shall be considered to be related as Miss Shriniti's brother is wholly

dependent on her.
Ü However, Miss Shrinti has taken interior decoration services for her residence and not in course or
furtherance of business. Consequently, services provided by Miss Shrinti's brother to her would not
be treated as supply under section 7 read with Schedule I.

3) If Miss Shriniti has taken interior decoration services for her business premises, services provided by
Miss Shriniti's brother to her would be treated as supply u/s 7 read with Schedule I, as the same are
provided in course or furtherance of business.

CCP 02.06.20.00
Examine whether the following activities would amount to supply under section 7 read with Schedule I:
a) Sulekha Manufacturers have a factory in Delhi and a depot in Mumbai. Both these establishments
are registered in respective States. Finished goods are sent from factory in Delhi to the Mumbai

depot without consideration so that the same can be sold from the depot.

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