Good Morning, Good Evening, Good Afternoon
Whoever is watching me
I would like to welcome that person
I would like to greet him
How are you all?
Great! Friends, in the last few lectures we had started the
chapter on supply
We were looking at what is supply?
What is the requirement of this chapter?
Then we started a discussion on this that if any person
asks you that will my GST be affected or not?
I do this business, I do that business
Will my GST be affected or not?
So what did you see first?
You used to check first whether it is covered in the
definition of supply or not?
What did we read to cover in the definition of supply?
First of all was there any sale or exchange of goods? of
goods or services?
After that was money involved? Was there consideration?
And thirdly, was it for business purposes?
If all these three tests were satisfying then what was my
supply?
And if my supply is satisfied, then obviously my GST will
be affected on the first provision of services my GST will
be applied.
After this we read 2-3 more things that there is
consideration there is business here but there are some
things where there is no business purpose there is no
business purpose still in the definition of supply we
covered it.
For example import of service import of service there was
money there was consideration but there was no business
purpose.
Like I gave you an example that a software was developed
from USA for gaming for personal purpose not for business
purpose for personal purpose.
So what happened in that case?
In that case in the definition of supply we covered it.
Then we read one more thing what was that?
It was about consideration so there were some things where
there was no money but still we considered it as supply.
What were those things?
It was written in our schedule no.1
In schedule no.1 four things were written our schedule no.1
four things were written where there is no money there is
no consideration there is no consideration but still it is
supply.
Here in schedule no.1 we started our discussion and we
covered two points.
First point was that you transfer your business assets
permanently.
You got a cloth and you gave it for free.
But the condition was you have already claimed the ITC on
it.
No problem.
We had already claimed ITC.
What was the second point?
It was about related party.
Related party or any distinct person
Related person or distinct person if they are transferring
each other doing sale of goods, provision of services doing
services without consideration that too will be covered in
the definition of supply.
It will come in schedule no.1 and where is schedule no.1
coming?
It is being covered in the definition of supply.
This is the definition of supply along with these two
things.
Now we had two more points left.
We have to discuss this today.
We have to discuss this.
What were these two points?
I will take you on the concept.
The third point is the relation between principal and agent
if you supply any goods between it.
If you are supplying goods between principal and agent that
too will be covered in schedule no.1.
As soon as it will be covered in schedule no.1 it will be
covered in the definition of supply and the applicability
of GST will be covered.
Let's try to understand this in simple language.
What I am trying to say?
Consider this as an example.
For example,
I am sitting here in Delhi.
Mr. P is sitting here in Delhi.
Suddenly he thought why not
I have to do business why not I do apple business.
I will sell apples.
I will become a big business of apples.
He thought this.
Then he thought he thought where will I get best quality
apples in Delhi.
Because apples in Delhi are not of that quality.
If I want to increase my business then I will have to bring
a good quality product and sell it here.
So I found out
Mr. P found out and called people here and there.
He found out that apples in Kashmir are very good and tasty.
It is also good to eat.
And good price of apples in Delhi will be available.
There is a lot of demand here.
But because Mr.
P was in some other work earlier now he is in apple
business.
He has just started apple business.
So he does not know which market is there in Kashmir and
from where to buy at what price.
Exactly in which location
I will get the cheapest product.
Then he started calling some people.
He called some people in Kashmir.
Mr. A was there.
He called Mr. A.
And he called Mr.
A and said, Mr.
A, I have heard that you do apple business.
You are also in vegetable and fruit business.
He said, Mr.
A, I do not do business in a full-fledged way.
Yes, but my knowledge is sufficient.
The people who are selling apples in the market who are
bringing these things from behind,
I know at what price
I will get the product.
At what price
I will get the product.
I have an idea about this.
Mr. P said,
Okay, sir.
I have an idea.
Do one thing.
You go to the market.
You are from Kashmir.
You go to the market.
From there, you buy a good quality apple.
On my behalf, you buy that apple and send it to me here in
Delhi.
So, this is the market.
From the market, this apple will come to Mr.
And from Mr.
A, it will come to Mr.
What is Mr.
A doing?
What is Mr.
A doing?
He is supplying this apple to Mr. P.
There is a sale of goods.
Supply of goods is being done.
Mr. A is giving goods to whom?
To Mr. P.
He is working as an agent.
He is not his servant.
He is not his employee.
He is working as an agent.
This is the purpose of this.
Wherever you see the cheapest apple, you collect it from
there.
After collecting, you supply it to me here.
Whatever commission you get, whatever payment you get,
I will pay you.
This is a simple concept.
What will he become?
Agent.
Will this also be covered in the definition of supply?
This is my question to you.
Will this also be covered in the definition of supply?
This is the point.
Will it or will it not?
We will know if we read further.
But the question is, keep this in your mind.
Is this also a supply?
Should this also be considered as a supply?
Point no. 2.
What is point no.
Point no.
2 is that there is a great artist.
You must have heard of him.
M. F. Hussain.
M. F. Hussain is a great painter.
A great painter.
He has made many names in his life.
He made a painting.
His business is to make a painting and sell it.
And the money he earns is his receipts, his sale proceeds,
his consideration.
Now, consider a transaction. For example, he made a
painting, a beautiful painting.
Look, I have made this painting. I have made this mountain,
this river, this sun.
He made this painting.
And when he made the painting, he called his secretary and
staff and said, I am M.
F. Hussain.
I have a brand value, a market value.
I will not supply any painting below this.
So, I have a pricing of a minimum of Rs. 10 lakhs.
I charge a minimum of Rs. 10 lakhs to sell any painting.
He said, no problem, sir. It is your brand value. You can
buy it.
He said, Rs. 10 lakhs is there. It is there.
But, if it is sold above that, then what is the problem?
So, he made a scheme. He made a planning.
What should we do? What should we do so that we get Rs.
10 lakhs?
Apart from that, if we have to get some money, then what is
the problem?
So, he made a planning. He made a scheme.
Under that, he spoke to an auctioneer.
He said, brother, do one thing. You get this painting
auctioned.
You must have seen in movies, in Bollywood films, that
there are auctions.
You tell the auctioneer, brother, Rs. 10 lakhs.
So, I want a minimum. Whatever you sell above that, I am
giving you a 10% commission.
He said, okay, sir.
The painting reached the auctioneer's place.
He showed his painting and started saying, brother, this is
M. F. Hussain's painting.
And because M. F. Hussain has made it, the auction will
start with a minimum of Rs. 15 lakhs.
He increased Rs. 5 lakhs like this.
He said, at least this unique gift that M.
F. Hussain has made,
he is an artist.
He is an artist in this painting.
So, this painting starts with a minimum of Rs. 15 lakhs.
So, is there anyone?
Someone raised Rs. 16 lakhs. Someone raised Rs. 18 lakhs.
Rs. 20 lakhs. Rs. 22 lakhs. Rs. 25 lakhs.
In the end, this painting was sold.
In the end, a man came in a very long car.
Till now, the bidding of Rs. 25 lakhs was there.
In the end, a man came in a very long Mercedes.
And the bidding of Rs. 25 lakhs was going on.
He smoked a cigarette, put a lighter in his mouth and said,
the price of this painting will be Rs.
50 lakhs.
That man came, said Rs. 50 lakhs and went back in his car.
The secretary standing there cut the cheque and took the
painting.
Till now, it is not known who that man was.
He came in a big car, put a bid of Rs.
50 lakhs for a painting worth Rs.
25 lakhs and took the painting and sent it to his secretary.
Till now, it is not known.
Brother, if you come to know, please tell us who that man
was.
Anyway, the question was that his painting worth Rs. 50
lakhs was sold in the market.
The person who did the bidding will supply the painting.
He will take Rs. 50 lakhs from here.
He will give Rs. 50 lakhs to M. F. Hussain.
And he will get his commission in between.
Simple point.
Now, this transaction is being done by the principal.
Who is the principal in this?
M. F. Hussain.
Who did he supply his painting to first?
The man who did the bidding.
Brother, at least keep my painting here and give me the
money later.
Should this also be considered as a supply?
This question is being asked.
I have told you two cases till now.
One is the apple one and the other is the painting one.
Will this be covered in the definition of supply?
The most expensive question, the most amazing question, the
most surprising question of this time is this, my friend.
Come, let us see what the answer to this will be.
You think of the answer in your mind.
I will not tell you the answer.
I want to know what you think.
What is your thinking?
Come, sir.
Try to read.
Try to understand.
Let us see if your answer was right or wrong.
Come, sir.
He is saying that supply of goods by principal to the agent
without consideration where agent undertakes to supply such
goods on behalf of the principal.
What do we consider this?
We consider this as supply.
The agent has made a deal that I will supply your goods.
I will supply your painting.
I am your agent and you are my principal.
Will this transaction be covered in the definition of
supply?
The answer is yes.
This transaction will be covered in the definition of
supply.
Point number 2.
The apple example.
He is saying that similarly supply of goods by the agent to
the principal without consideration where agent undertakes
to receive such goods on behalf of the principal is
considered as supply.
The agent has made a deal that you want the apple.
I will buy the goods from the market on behalf of you.
I will give it to you later.
Is that also a supply?
The answer is yes.
That is also a supply.
Let us read one more thing.
The point is that where the invoice for further supply is
being issued by the agent in his own name, the provision of
goods from the principal to the agent will fall here.
The painting which I am selling, when I will issue the
invoice for that painting, my name should fall on that
invoice.
The name of the agent should fall on that invoice.
Directly M. F. Hussain's billing will not fall there.
My name will fall there.
I am the agent.
I am supplying the goods.
That painting is with me.
It is with me.
I am supplying that painting from my premises.
My name will also fall on that.
If my name does not fall on that invoice as an agent, then
this transaction will be out of the definition of Schedule
1.
Then it will not be considered as a supply.
Whatever transaction is going on between the principal and
the agent, the name of the agent will definitely fall on
that invoice.
Definitely.
The name of the agent will definitely fall.
If the name of the agent does not fall, then it will be out
of the definition of Schedule 1.
Look at this one.
If only the name of the principal is coming, only M.
F. Hussain's name will fall on the bill, then it will not
be considered as a cover in Schedule 1.
It will be out of the definition of Schedule 1.
Then it will be that I am just a selling agent.
I am providing a kind of broking services.
But here my hard work is of a different kind.
I am bringing in customers.
I am increasing their price.
I have increased the price of 10 lakhs to 50 lakhs.
I am also working hard.
I am not simply providing broking services.
I am also working hard.
I am also getting the sale of goods done.
So, it is important for my name to fall on the invoice.
Definitely.
Sir, this was the point about the principal and the agent.
Look at this.
Let's move ahead, sir.
You can do the reading of this.
These are the same things that I have told you.
All the examples are the same.
Let's come to the last point of Schedule 1.
Our Schedule 1 is covered with this.
This is import of service by a person.
Either from a related person.
Or from his establishment located outside India.
Without consideration.
This Schedule 1 is without consideration.
All the activities that are given in Schedule 1.
All those activities are without consideration.
So, even if it was not written without consideration.
It would have been understood.
That we are reading Schedule 1 without consideration.
Still, GST is being applied.
Still, supply is being accepted.
Okay.
Import of services by a person.
From a related person.
Or from his establishment outside India.
Without consideration.
In the course and furtherance of business.
We will consider it as supply.
For example.
I have a company in Delhi.
And the branch of my company is in America.
And I told my branch in America.
That I need a software.
For accounting.
Accounting is being telecasted.
I am bored of telecasting.
I need a new kind of software.
A software where I show a bill and click a picture of it.
And it automatically gets entered.
The Americans developed the software. My branch in America
developed the software.
And after developing the software, they gave me the
software.
Basically, what is happening?
What is happening? This is an import of service.
If I am sitting in India or Delhi, for example.
And this software is being given to me from USA.
This is being given to me by the software.
And I have made this policy.
I have made this policy that if the branch supplies any
goods or services to the head office.
Or if the head office supplies any goods or services to the
branch.
In that case, no money will be charged to each other.
This is the policy of my company.
That we will not apply any transfer pricing.
If I am getting any software from America.
Then the branch in America will not raise any billing to my
main head office.
This is my policy.
What is coming to me? Software is coming.
Software is being imported. Software is being ordered from
abroad.
From whom is it being ordered?
My establishment is outside India.
Or it could have been that I had a relative.
In a related person, members of the same family also come.
Suppose my son used to live in America.
He developed that software and gave it to me in India.
So either related party or establishment outside India.
A software is being developed there.
And they are developing that software and giving it to me.
For which they are not charging any money.
For any reason.
They are giving it for business purpose.
So it is a simple thing.
That will also be covered in Schedule No. 1.
That will also be considered as a supply.
And as soon as we consider it as a supply.
Our GST provisions will also be applied on that transaction.
Did you enjoy?
Sir, this was Schedule No. 1.
We were talking about supply.
What happens in supply?
Why is it needed?
I have told you this many times.
That is why I am telling you again and again.
So that it gets into your mind.
Sir, why do you tell me this again and again?
Sir, when I used to study.
Teachers used to come.
Do you know the environment of schools and colleges?
I just don't want to say anything wrong.
Do you know the environment of schools and colleges?
A teacher comes.
He writes a few things on the blackboard.
He dictates a few things in the class.
And then he leaves.
Sir, when I was a student.
I used to face a lot of problems.
How will I understand such things?
He is just doing his work.
How will I understand?
Sir, that is why when I became a teacher.
When I came in this profession.
I took a promise from myself.
That I will explain one thing so many times.
I will explain it in so many different ways.
So that it gets into the mind of the person.
Now the things of supply.
I think they have got into your mind.
Because whenever I start Ram Kahani again.
Whether GST will be applied or not.
So how do we check?
We have to see the supply.
After supply, we have to see its schedule.
Schedule no. 1.
If it is covered in the definition of supply.
Then check schedule no. 1.
If it comes in schedule no. 1.
Then it is still supply.
No.
Even if it comes in schedule no. 1.
Even if it is covered in schedule no. 1.
Still that becomes a part of supply.
And when it becomes a part of supply.
When it is a supply.
On top of that GST provisions.
Are applied.
That is why sir.
I say the same thing again and again.
GST has a lot of scope.
It has a very blind scope.
And it is a blind earning.
You will learn things.
You will put it in the root of your mind.
You will immerse the concepts.
In the ocean of your mind.
I can't express it in words.
Where will you go from life.
There are some things.
There are some problems in understanding.
I agree.
Because you have just come out of 12th.
You are at the graduation level.
I know there will be some problems.
But I also understand this.
I am explaining at the very basic level.
I am putting a lot of effort.
So that you understand things.
Don't waste water on my effort.
Whatever I am teaching.
Please revise it.
Because schedule no. 2 will also come.
And schedule no. 3 will also come.
Sir.
There will be problems.
There will be confusion.
We have just studied schedule no. 1.
We have studied 4 activities.
Even if money is not involved in these 4 activities.
There will be 2 more schedules.
But don't worry.
Brother has come.
He will get everything done.
Don't worry.
Friends, I will stop today's lecture here.
Please revise a little.
And then I will meet you in the next lecture.
Thank you very much friends.