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Which of these is a supply even without consideration under paragraph 2 of Schedule I to the CGST Act, 2017?

Question and options

Which of these is a supply even without consideration under paragraph 2 of Schedule I to the CGST Act, 2017?

  1. A transfer of stock by a company from its Gujarat registration to its Maharashtra registration

  2. Free samples given by a trader to unrelated prospective customers

  3. Gifts worth ₹40,000 in a year given by an employer to an employee

  4. Services provided by an employee to the employer in the course of employment

Answer and explanation

Correct answer: A - A transfer of stock by a company from its Gujarat registration to its Maharashtra registration

Paragraph 2 of Schedule I to the CGST Act treats supplies between related persons or between distinct persons under section 25, made in the course or furtherance of business, as supplies even without consideration; separate registrations of one company in two States are distinct persons. Its proviso excludes gifts up to ₹50,000 a year from employer to employee, free samples to unrelated persons fall outside paragraph 2, and services of an employee to the employer are in Schedule III.

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