Sec 2(83) – Outward supply

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Sec 2(83) – Outward supply 2017-04-14T03:34:17+00:00
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    “outward supply” in relation to a taxable person, means supply of goods or services or both, whether by sale, transfer, barter, exchange, licence, rental, lease or disposal or any other mode, made or agreed to be made by such person in the course or furtherance of business;

    Priya MadrechaPriya Madrecha
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    For any transaction or activity to qualify as an outward supply, it must first be a ‘supply’ in terms of the GST law, unlike inward supplies, which could merely be receipts, not amounting to supply. Further, an outward supply is closely associated with a ‘taxable person’ being, a unit of a person that has, or is required to have, a separate registration.
    The phrase ‘outward supply’ can be applied to a supply only when such supply is made in the course or furtherance of business. Say, for instance, business assets are put to personal use. In such a case, even if the transaction is deemed to be a supply (made without consideration), it cannot be treated as an ‘outward supply’, since the application of the business asset for personal use was neither in the course nor furtherance of business.
    The following aspects need to be noted:
    •    Supplies not qualifying as outward supplies would also be included for the purpose of computing the ‘aggregate turnover’;
    •    In case of a composition supplier, where he engages with a recipient outside the State, and if the transaction does not result in an ‘outward supply’, (say, sending goods for job work outside the State), the conditions imposed on him as a composition supplier would not be violated (i.e., making inter-State outward supplies);
    •    Details of supplies on which tax is payable, but which do not amount to ‘outward supplies’ would also have to be declared in the return for outward supplies (GSTR-1);
    •    By treating goods or services agreed to be suppled as ‘outward supply’, the law authoresses imposition of GST on advance payments.

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