GST Inward Supply Definition : Issues and Suggestions

Suggestions on GST Acts (July 2017) by Institute of Chartered Accountants of India

6. Definition of “Inward Supply” – If removed denial of credit.

Section 2(67) of CGST Act provides that “inward supply” in relation to a person, shall mean receipt of goods or services or both whether by purchase, acquisition or any other means with or without consideration;

Issue

 Inward Supplies made without consideration are also treated as a part of total inward supplies. This means present definition shall cause the buyer to upload the purchases on GSTR 2 for the free supplies which shall not be posted by the supplier causing reconciliation issues. Since there is no levy on the free of cost supplies, this inclusion
of supplies without consideration need not be required.

 The current definition introduces new terms like ‘purchase, acquisition, etc.’ which appear to convey that they are the mirror opposite of each of the forms of supply in section 3(1)(a).

Suggestion

 It is suggested that supplies made without consideration be kept outside the purview of the definition of “Inward Supply”.

 The above definition be changed to ‘Inward supply’ in relation to a person with reference to whom the place of supply is determined means the corresponding supply by the supplier of the outward supply”.

Read ICAI Suggestions on GST Act to Govt : July 2017

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