Supply under GST — The primary point which has to be decided is whether the activity of depositing the timber by the Appellant to the Government Timber Depot is a ‘supply’ in terms of Section 7 of the CGST Act. Under GST, Supply is considered a taxable event for charging tax. Thus, determining whether or not a transaction falls under the meaning of supply, is important to decide GST’s applicability.

Held that— The Appellant has argued that if the act of depositing the timber at GTD is held to be a supply, then the question of charging supervision charges by GTD will not arise since they will be supervising their own goods. This is not correct. The act of depositing the timber at GTD is a supply in terms of clause 3 of Schedule I of the CGST Act. It is a supply of goods that is made without consideration by the Appellant as a principal to his agent. The Depot acting as an agent, renders a service of being the custodian of the timber at the depot till such time the timber is sold by the Depot in the auction process. Further, the depot also does the measurement and classification of the timber received from the Appellant since the Depot also stores the timber belonging to the Govt and other private parties. The Depot officials also give lot numbers to the timber logs according to the classification. It is for this service that the Depot charges ‘supervision charges’. This service rendered is outside the scope of clause 3 of Schedule I and hence the consideration received by the depot in the form of supervisions charges are liable to tax as a supply of service. We find that the Appellant has not disputed the ruling with regard to taxability of supervision charges. We uphold the ruling given by the lower Authority on this aspect. — Tata Coffee Limited, In Re… [2020] 22 TAXLOK.COM 105 (AAAR-Karnataka)