- The Budget 2021 has done away with concept of mutuality by specific provision dealing withe Scope of Supply in Section 7.Sub clause (aa) has been inserted
- Sub-clause (aa) to section 7(1) provides that-
- Supply includes transfers of any goods or services or both by a person (other than an individual) to its members or constituents.
- Supply also includes transfers of any goods or services or both by the members/ constituents to the person (other than an individual).
- The transfer, referred above, is covered as supply when undertaken for cash or deferred payment or any other valuable consideration.
- Explanation to sub-clause (aa) to section 7(1) provides thatr-
- It shall be deemed that the person and its members/ constituents are two separate persons.
- Accordingly, the supply of any goods or services or both between the person and its members/ constituents shall be deemed to have been taken as supply from one person to another.
- With effect from( retrospectively) from 1st July 2017.
The paragraph 7 to schedule II [activities to be treated as supply of goods or supply of services].is sought to be deleted to include the services also. This proposals are likely to be passed in parliament.
