EXAMPLE-74

State whether the following activities are covered under supply in GST? If yes, whether supply of goods or service? How the rate is determined?

(i)                  Danny provides Danny DJ service during the marriage event. DJ service provides DJ services on 25/08/2017 up to 5 hours of music for a total consideration of Rs. 10000.

(ii)               Ms ABC Ltd provides right to use of projector to Mr. A for a month. Control of such projector for use is also transfered to Mr. A.

(iii)             XYZ Construction Ltd supplied shuttering to the builder. The builder is in effective control of the shuttering during the period it remains in his possession (i.e during the construction).

(iv)             When tents, crockery and furniture are given by dealers to customers as such and the customers erected tents etc. on their own, and pay hire charges for the tents, kanats, crockery etc.

Answer

Paragraph 5, point (f) of schedule II specifies that transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration shall deemed as supply of services. Under erstwhile taxing provisions, there was an issue of right to use, whether the effective control is transferred with the supply of goods or not. Where effective control was transferred was treated as supply of Goods and chargeable to VAT and where no control was transferred the same was taxable under Service Tax. But in GST this issue is resolve without taking into consideration of transfer of control. Transfer of right to use is treated as supply of service in according to Schedule II.

In view of the above situation (i) right to use of DJ, situation (ii) right to use of projector along with control, situation (iii) supply of shuttering for use to builder and situation (iv) right to use of tents, crockery and furniture for marriage event, all are taxable under GST and treated as supply of services.