Section
7. Scope of supply.-
(1)
For the purposes of this Act, the expression - "supply"
includes-
(a)
all forms of supply of goods or services or both such as sale, transfer,
barter, exchange, licence, rental, lease or disposal made or agreed to be made
for a consideration by a person in the course or furtherance of business;
1[(aa)
the activities or transactions, by a person, other than an individual, to its
members or constituents or vice-versa, for cash, deferred payment or other
valuable consideration.
Explanation .-For
the purposes of this clause, it is hereby clarified that, notwithstanding
anything contained in any other law for the time being in force or any
judgment, decree or order of any Court, tribunal or authority, the person and
its members or constituents shall be deemed to be two separate persons and the
supply of activities or transactions inter se shall be deemed to take place
from one such person to another;]
(b)
import of services for a consideration whether or not in the course or
furtherance of business; 2[and]
(c)
the activities specified in Schedule I, made or agreed
to be made without a consideration; 3[****]
(d) 4[****].
5[(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.]
(2) Notwithstanding
anything contained in sub-section (1),-
(a) activities
or transactions specified in Schedule III; or
(b) such
activities or transactions undertaken by the Central Government, a State
Government or any local authority in which they are engaged as public
authorities, as may be notified by the Government on the recommendations of the
Council,
shall
be treated neither as a supply of goods nor a supply of services.
(3) Subject
to the provisions of 6[sub-sections (1), (1A) and (2)], the
Government may, on the recommendations of the Council, specify, by
notification, the transactions that are to be treated as -
(a) a
supply of goods and not as a supply of services; or
(b) a
supply of services and not as a supply of goods.
