Non gst supply

[Madhavan iyengar]

Securities are neither goods nor services hence should they not fall under non gst supplies, non gst supply is not defined in gst law

however for purpose of gst itc reversal in rules 1% of value of securities will be treated as exempt supply

Issue: Should sale of securities be shown under non gst supply or only 1% of sale value to be shown under exempt supply

[KASTURI SETHI]

Which is nether supply of goods nor supply of services that is out of scope of GST. Out of GST means non-GST. Hence no question of exempt supply, taxable and non-taxable supply. The question of exemption from GST, taxability or non-taxability arises only if it is within the scope of GST. Hence here it is non-GST. When we call any activity non-GST, the term, " Supply" is relegated to the background.

[Madhavan iyengar]

Sir kindly see below point as given in CGST rulesChapter V on ITC

Explanation.- For the purposes of this Chapter,-

(1) the expressions "capital goods" shall include "plant and machinery" as defined in the Explanation to section 17;

(2) for determining the value of an exempt supply as referred to in sub-section (3) of section 17-

(a) the value of land and building shall be taken as the same as adopted for the purpose of paying stamp duty; and

(b) the value of security shall be taken as one per cent. of the sale value of such security.

It is in this context that for reversal purpose the value of exempt supply will be the value of security to be taken as 1% of value of such security sold

a) The issue is with respect to disclosure in the GSTR-1/ and 3B returns at what value should security be shown and under which head of supply ( Non GST supply or exempt supply)

b) similarly interest earned on fds/ bank a/cs whether it is a nil rated supply or exempt (for purpose of discloure in GSTR-1 and 3B ?? )

another interesting point is Security is neither a good nor service so can it be treated as a supply at all.

AI Summary

Non-GST supply: securities treated as out of scope while rules prescribe a nominal exempt valuation for ITC reversal. Securities are not goods or services and thus are non-GST (out of scope) supplies; nevertheless, for the limited purpose of ITC reversal under section 17(3) and Chapter V of the CGST Rules, the value of a security is prescribed as a nominal fraction of its sale value to be treated as the value of 'exempt supply.' This distinction raises disclosure questions for GSTR-1 and GSTR-3B-whether sales of securities should be shown as out-of-scope supplies or under exempt-supply heads-and analogous questions arise for interest income reporting.