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CCP 02.03.06.00

Glory Ltd. is engaged in manufacturing and selling of cosmetic products. Seva Trust, a charitable
organisation, approached Glory Ltd. to provide financial assistance for its charitable activities. Glory
Ltd. donated a sum of ` 2 lakh to Seva Trust with a condition that Seva Trust will place a hoarding at the
entrance of the trust premises displaying picture of products sold by Glory Ltd. Examine whether this
activity would amount to "supply" under GST law? [CA Inter May 22 Exam]

Answer:-
Legal Provision:-
Ü An activity qualifies as supply under GST only if it is for a consideration and is in course/furtherance of
business.

Ü Donations received by the charitable organizations are treated as consideration only when there's an
obligation on part of the recipient of the donation to do anything.
Discussion & Conclusion:-
Ü Since in the given case, the display of products sold by the donor – Glory Ltd. - in charitable organization's
premises aims at advertising/promotion of its business, it is supply for consideration in

course/furtherance of business and thus, qualifies as supply under GST law.

04. Sec 7(1)(aa): Supply by person other than individual to its members

CCP 02.04.07.00
A Resident Welfare Association provides the service of depositing the electricity bills of the residents in
lieu of some nominal charges. Whether this activity is treated as supply under the GST Act?
Answer:-
Legal Provision:-

Ü As per section 2(17) of CGST Act, 2017, Business includes provision of service by club or association or
society to its members for a subscription or any other consideration.
Ü As per Section 7(1)(aa) of the said act, supply includes activity/ transaction supplied by a person other

than an individual for its members for consideration. Explanation to this section states that such person
and its members are deemed to be two separate persons & supply between them deemed to take place
from one person to another.
Discussion & Conclusion:-
Ü In this case, Resident Welfare Association is a person other than an individual and it is providing service to

its members by way of depositing the electricity bills of the residents in lieu of some nominal charges.
Ü Hence, this transaction is treated as supply u/s 7(1)(aa).

05. Sec 7(1)(c) read with Schedule I: Activities to be treated
as supply even if made without consideration
CCP 02.05.08.00
Prithvi Associates is engaged in supply of taxable goods. It enquires from its tax advisor as to whether
any activity can be treated as supply even if made without consideration in accordance with the

provisions of the GST law. You are required to enumerate such activities, if any (Study Mat)
Answer :-
Section 7(1)(a) of CGST Act stipulates that the supply of goods &/or services should be for a consideration

and should be in the course or furtherance of business. But, Section 7(1)(c) states the Activities to be

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