Page 7 - Ch2_Supply

Answer:-

i) No, as security deposit given in this case is not applied by the supplier towards the mobile handset
provided by it. Hence, GST will not be charged as there is no supply in absence of consideration.
ii) In this case, there are two supplies as follows:-
a) Sale of gold necklace by Jeweller to the customer:-
It falls under the ambit of 'supply' as the sale of Jewellery by the Jeweller is in the course of his Ü

business.
Consideration paid by customer is partly in kind for 200 gms & partly in money for 75 gms.Ü
GST shall be charged on value determined as per open market value for 275 gms of gold necklace. Ü

b) Sale of old gold articles by customer to Jeweller:-
It is out of the purview of 'supply' as the sale by customer is not in the course of business. Hence,
GST will not be charged.
Yes, as supply of motor bike is in response to an offer to join (i.e. inducement to join) the cricket
iii)
club & thus, GST shall be charged.

iv) No, Section 2(31) of CGST Act clearly states that “consideration” excludes the value of subsidy given by
State Government. Thus, in the given case, GST will be charged on value excluding subsidy.
v) Yes, Section 2(31) of CGST Act clearly states that “consideration” excludes the value of subsidy given

by Central Government or State Government. But, in given case, subsidy is given by the supplier and
not by Government. Hence, subsidy is treated as consideration & GST will be charged on value
including such subsidy.

CCP 02.03.05.00

The temple of ancestral deity of Mr. Aman Goel and his family is located at Beri, Haryana. The temple is
run by a charitable organisation registered under section 12AA of the Income Tax Act, 1961. The family
has got unshakeable faith in their ancestral deity. Mr. Aman is a big entrepreneur having flourishing
business of tiles in Gurugram. Upon the birth of their first child, he donated `10 lakh to the said temple

for construction of a sitting hall in the temple. On the main door of the sitting hall, a name plate was
placed stating "Donated by Mr. Aman Goel upon birth of his first child".
You are required to examine the leviability of GST on the donation received from Mr. Aman Goel? [CA
Inter RTP May 2020].
Answer:-

Legal Provision:-
Ü As per CBIC clarification, if a name plate or similar acknowledgement is placed in the premises of religious
institution displaying donor's name just as an expression of gratitude and public recognition of donor's

act of philanthropy, then there is no supply of service for a consideration (in the form of donation) &
there is no GST liability on such consideration.
Ü But the condition is that the displaying of name is not aimed at giving publicity to the donor to advertise or
promote his business.
Ü Here, Recipient of donation/ gift has no obligation (quid pro quo) to do anything i.e. supply a service.

Discussion & Conclusion:- In the given case,
Ü The payment made to a charitable organization has the character of gift or donation.
Ü As there is no reference or mention of any business activity of the donor so as to advertise it, the
purpose is also philanthropic (i.e., it leads to no commercial gain) & thus, not leviable to GST.

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