TaxTMI 
TaxTMI 
Definition of Business
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....efinition of Business<br>By: - Pradeep Jain<br>Goods and Services Tax - GST<br>Dated:- 16-1-2017<br><br>DAILY DOSE OF GST UPDATE BY CA PRADEEP JAIN Continuing with the analysis of the revised GST law, we shall today discuss changes bought in the definitions as provided in the law: 1. 2(17) Business: the new definition reads as follows: "Business includes - (a) Any trade, commerce, manufacture,....
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.... profession, vocation or any other similar activity, whether or not it is for a pecuniary benefit; (b) Any activity or transaction in connection with or incidental or ancillary to (a) above; (c) Any activity or transaction in the nature of (a) above, whether or not there is volume, frequency, continuity or regularity of such transaction; (d) Supply or acquisition of goods including capital asse....
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....ts and services in connection with commencement or closure of business; (e) Provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members, as the case may be; (f) admission, for a consideration, of persons to any premises; and services supplied by a person as the holder of an office which has been accepted....
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.... by him in the course or furtherance of his trade, profession or vocation; Explanation:- Any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities shall be deemed to be business." When this definition given in revised GST law is compared with old definition given in model GST law, it can be noted th....
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....at a new explanation is added in the clause aiming to cover any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities in the definition of business. This has been added to make it amply clear that the functions and activities undertaken by the government as public authorities shall be treated as busin....
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....ess activities. Treating them as business has a large impact to the extent GST is considered. Not only the definition of supply but the cenvat credit provisions, all mandate that the activities undertaken by the taxable person should be in the course or furtherance of business. Even the place of business is very important for registration purposes. At the same time the definition of supply also s....
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....tates that activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities as specified in Schedule IV shall be treated neither as supply of goods nor a supply of services. By this clause specified activities carried out by the Government as public authorities have been taken out of the definition of Supply ....
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....meaning that GST shall not be applicable on them. In view of the above, the addition of the explanation in the definition of business seems only to clarify that apart from the activities mentioned in the schedule IV, all other activities shall be termed as business transactions and will be covered under GST. Even in the present system of service tax also, there is reverse charge mechanism on all....
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.... services provided by Government except the services mentioned in schedule IV. This implies that the same system will continue in the proposed GST also and it might be possible that the reverse charge will be applicable on the same. Moreover, we have seen that there is controversy of service tax liability on club and association. On the basis of principal of mutuality, it was held that club and i....
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....ts members are one and same person and hence the service tax is not applicable on the same. It was held by Bihar High Court in case of Ranchi club and Gujarat High Court in case of Karnavati club. Now, by including it in definition of "Business", the Government intends to end the same. Also, there was another dispute between the department and assessee whether admission to any premises ....
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....can be termed as a service. But the Government has also tried to put an end to the same by specifically mentioning that it will be termed as "business" and hence GST will be applicable on the same. Another inclusion in the definition is that of ancillary activities to business. Thus the scope of commercial activities has been widened thus also bringing about clarity on the issue of clas....
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....sification of a particular activity in the definition of business. You may visit us at www.capradeepjain.com Reply By Khagendranath Mahato as = A very broad of general nature inclusive definition creates more and more disputes and litigations edging over its advantages. What is your opinion in this regard, sir. Dated: 18-1-2017<br> Scholarly articles for knowledge sharing by authors, experts....
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...., professionals ....