Deeming Provision in Schedule 2

[VENU K]

Sec 7 Scope of Supply

Sub Section (1A)

where certain activities or transactions, constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II

Schedule II

“Activities or Transactions” to be treated as Supply of Goods or Supply of Services

Paragraph 4) Transfer of business assets

(c) where any person ceases to be a taxable person, any goods forming part of the assets of any business carried on by him shall be deemed to be supplied by him in the course or furtherance of his business immediately before he ceases to be a taxable person, unless—

(i) the business is transferred as a going concern to another person; or

(ii) the business is carried on by a personal representative who is deemed to be a taxable person.

The question is Schedule II is only for identifying whether something which has been already been identified as a Supply as per the provisions of sub-section 1 of Section 7 ought to be treated either as a supply of goods or as a supply of Services. Basically it is only treated as a reference for identifying nature of supply or even we can say, a deeming provision to classify supply into supply of Goods or Services.

Then, in such case can there be a deeming provision such as paragraph 4 c in Schedule II. Further it is interesting to note that it does not identify such deemed supply into any category.

So can such a deeming provision logically operate ?

Or am I missing something ?

AI Summary

Clarifying Schedule II in GST: Classification of Business Asset Transfers and Their Tax Implications Under Paragraph 4(c). The discussion revolves around the interpretation of Schedule II in the Goods and Services Tax (GST) framework, specifically concerning the classification of certain activities as supplies of goods or services. A query was raised regarding the deeming provision in Schedule II, Paragraph 4(c), which deals with the transfer of business assets when a person ceases to be a taxable entity. The question is whether Schedule II can logically operate as a deeming provision without categorizing deemed supplies. A respondent clarified that Schedule II is primarily for classification, not for deeming transactions as supplies, and emphasized the need to analyze specific transactions to determine if they qualify as supplies under GST.