Page 17 - Ch2_Supply

'Negative List'. [CA IPC July 21 Exam] [CA Inter May 23 Exam]
Answer:-

Ü As per section 7(2)(a) of CGST Act, 2017, activities or transactions specified in Schedule III shall be
treated neither as a supply of goods nor a supply of services.
Ü Activities/transactions specified under schedule III of GST Act as non-supplies/ “Negative List” are as
follows:

Para Activities or transactions which shall be treated neither as a supply of goods
No. nor a supply of services:-

1. Services by an employee to the employer in the course of or in relation to his employment.

2. Services by any court or Tribunal established under any law for the time being in force.
3. a) Functions performed by the Members of Parliament, Members of State Legislature, Members of
Panchayats, Members of Municipalities and Members of other local authorities.
b) Duties performed by any person who holds any post in pursuance of the provisions of the
Constitution in that capacity.

c) Duties performed by any person as a Chairperson or a Member or a Director in a body established
by the Central Government or a State Government or local authority and who is not deemed as an
employee before the commencement of this clause.

4. Services of funeral, burial, crematorium or mortuary including transportation of the deceased.
5. Sale of land and, subject to paragraph 5(b) of Schedule II, sale of building.
6. Actionable claims, other than specified actionable claims.

CCP 02.07.22.00

Determine whether following activities fall under the purview of supply as per section 7 of CGST Act,
2017:-
i) Mr. Raj hires an ambulance for transport facility of a deceased person to performing funeral rituals.
ii) Mr. S enters into an agreement for sale of land to Mr. R for a consideration.

iii) M/s ABC developers sold fully furnished building to Mr. Sagar for a valuable consideration.
Answer:-
i) As per section 7(2) read with para 4 Schedule III of CGST Act, Services of funeral including
transportation of the deceased shall be treated neither as a supply of goods nor a supply of services. Thus,
there is no levy of GST on such activity as it is out of scope of supply.

ii) As per section 7(2) read with para 5 Schedule III of CGST Act, Sale of land shall be treated neither as a
supply of goods nor a supply of services. Thus, there is no levy of GST on such activity as it is out of scope
of supply.
iii) As per section 7(2) read with para 5 Schedule III of CGST Act, subject to paragraph 5(b) of Schedule II,

Sale of building shall be treated neither as a supply of goods nor a supply of services.
Paragraph 5(b) of Schedule II states that where the entire consideration has been received after
issuance of completion certificate or after its first occupation,
whichever is earlier, then it is not a supply at all.

Thus, there shall be no levy of GST on such activity as it is out of scope of supply.

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