Page 123 - GSTL_20th August 2020_Vol 39_Part 3

2020 ] IN RE : SHILPA MEDICARE LTD. 337
Section 7(1)(a) of the CGST Act, 2017 defines the scope of supply which
reads as under :
7. (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;
In the instant case the activity of the ‘transfer’ is made for a consideration, but
neither in the course of the business nor for the furtherance of the business. A
going concern is a onetime affair made where the business is sold including as-
sets in entirety or an independent part thereof. Even though this transaction does
not amount to a ‘supply’ as per definition, but qualified to be one under the
scope of supply as it is backed by the term ‘includes’ in Section 7(1) of the CGST
Act, 2017. Thus, in the broadened interpretation of the term ‘includes’, this activi-
ty is brought under the scope of supply.
Now we determine whether ‘ongoing concern’ is to be treated as ‘supply
of goods’ or ‘supply of services’.
Part 4(c) of Schedule II of the CGST Act, 2017 refers to the ‘transfer of
business assets’ which reads as under :
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
A plain reading of the above clarifies that the transfer of business assets is ‘sup-
ply of goods’. But in the instant case the business in its entirety is transferred or
sold along with capital assets. Thus, it disqualifies the ‘going concern’ to be
grouped under ‘supply of goods’ as per the above-mentioned clause 4(c).
The definition of services under Section 2(102) of CGST Act, 2017 reads
as -
(102) “services” means anything other than goods, money and securities
but includes activities relating to the use of money or its conversion by cash
or by any other mode, from one form, currency or denomination, to another
form, currency or denomination for which a separate consideration is
charged;
Thus, the definition of services qualifies ‘anything other than goods’ as service.
In this context it is obvious that the ‘going concern’, which was excluded from
list of ‘supply of goods’ as discussed above, would automatically fall under
‘supply of services’.
Further, the description of services under Sl. No. 2 of Chapter 99 of Noti-
fication No. 12/2017-Central Tax (Rate), dated 28-6-2017 provides for “Services by
way of transfer of a going concern, as a whole or an independent part thereof” as nil rat-
ed. Hence, the transaction is not liable to tax.
GST LAW TIMES  20th August 2020  123