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order, postal/electronic remittance or any such similar instrument recognized by RBI.
Ü Non-monetary consideration essentially means consideration in kind.

02. Sec 7: Supply
CCP 02.02.02.00
"Exchange is a form of supply of goods or services or both, made or agreed to be made for a

consideration by a person in the course or furtherance of business". Explain it with help of example.
[ICAI RTP Jun 2018]
Answer:-
Ü When two persons mutually transfer the ownership of one thing for the ownership of another, neither

thing nor both things being money only, the transaction is called an exchange.
Ü Exchange offers on products like televisions, mobile phones, refrigerators, etc. are leviable to GST.
Ü Example:- Mr. X is a dealer of new cars. He sells new cars for ₹ 8,25,000 & agrees to reduce ₹ 1,25,000 on
surrendering of old car. Mr. Y who intends to buy new car worth 8,25,000 agreed to exchange his old car ₹
with new car. Under GST law, it will be treated as Mr. Y has made supply of old car to dealer Mr. X and Mr. X

has made supply of new car to Mr. Y. If Mr. Y is registered person, he will be liable to pay GST on 1,25,000. ₹
Whereas, Mr. X will be liable to pay GST on 8,25,000 irrespective of fact that whether Mr. Y is a registered ₹
person or not.

03. Sec 7(1)(a): Supply for consideration in the course or furtherance of business
CCP 02.03.03.00
Meghraj & Co. wishes to commence the business of supplying ready-made garments within Punjab and

in the neighbouring States of Delhi and Haryana. Kindly state as to what is the taxable event under GST
and leviability of CGST, SGST/UTGST and IGST on the same? (Study Mat)
Answer :-
Ü Taxable event under GST is the supply of goods or services or both made for consideration in the course

or furtherance of business.
Ü CGST and SGST will be levied on intra-State supplies.
Ü IGST will be levied on inter-State supplies.

CCP 02.03.04.00
Determine whether there is consideration in following cases & also state whether GST is chargeable:-
i) Reliance JIO offers free mobile handset on payment of security deposit worth ₹ 1500/- which is fully
refundable.

ii) Isha, a customer purchases a gold necklace weighing 275 gms from PN Gadgil Jewel showroom. In
exchange, she sells her old gold articles weighing 200 gms & pays differential amount in cash.
iii) RC cricket association Chennai, gifts a motor bike to Rahul as inducement to join their cricket club.

iv) XYZ ltd. is manufacturing fertilizers used for agriculture purpose. State govt. has given 30% subsidy on
sale of such fertilizer.
v) ABC and Co., a trading concern, has supplied the product X to Mr. Y at subsidized rate of ₹ 30,000
(Open market value of such goods is ₹ 45,000). The supplier of ABC and Co. has given the subsidy to it
to compensate for the price difference.

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