Section 2(17) - Definition of "business" under CGST Act
2(17).1 Definition of Business
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Section 2(17) |
2(17).1.1 Trade, commerce, manufacture, profession, vocation, adventure etc
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(a) any trade, commerce, manufacture, profession, vocation[i], adventure, wager[ii] or any other similar activity, whether or not it is for a pecuniary benefit; (b) any related activity or transaction to (a) above; (c) any activity or transaction in the nature of (a) above, whether or not there is volume, frequency, continuity or regularity of such transaction; |
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Ex on Vocation: Sundaram Acharya, a famous actor, paints some paintings and sells them. The consideration from such sale is to be donated to a Charitable Trust – ‘Kind Human’. The sale of paintings by the actor qualifies as supply. |
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Business also includes any activity/transaction which is incidental or ancillary to any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity. |
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All above activities/ transactions may be for profit or not profit motive. Even charitable activities if covered above will be treated as business. |
2(17).1.2 Supply related to Commencement/ Closure of Business
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(d) supply or acquisition of goods, capital goods and services in connection with commencement or closure of business; |
2(17).1.3 Services by Club, association, society to its member
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(e) services (facilities or benefits) provided by a club, association, society, or any such body to its members |
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Ex |
A Resident Welfare Association provides the service of depositing the electricity bills of the residents in lieu of some nominal charges. Provision of service by a club or association or society to its members is treated as supply as this is included in the definition of ‘business’. |
2(17).1.4 Admission to any premises
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(f) admission of persons to any premises for consideration |
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Ex |
Services by way of admission to circus, cinema halls, amusement parks including theme parks, water parks, etc. are considered as supply as these are services by way of admission of persons to any premises for a consideration. |
2(17).1.5 Services as an holder of an officer
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(g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation; |
2(17).1.6 Race club
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[1][(h) activities of a race club including by way of totalisator[iii] or a license to book maker or activities of a licensed book maker in such club; and |
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Ex |
Royal Turf Race Club is engaged in facilitating the wagering (betting) transactions on horses placed through totalisator9. For providing the service of facilitating wagering transactions, Royal Turf Race Club gets commission which is deducted and retained by the club from the total bet value. Said services amount to supply as the activities of a race club are included in business. |
2(17).1.7 Activities by Central/state govt. or local authority as public authorities
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(i) any activity or transaction undertaken by Central/ State government or any local authority in which they are engaged as public authorities |
[1] Clause substituted by Section 2(b) of The CGST(A) Act, 2018 dt. 29-08-2018 and made effective from 01-02-2019 by Notification No. 02/2019-Central Tax dt. 29-01-2019. Earlier it read as under
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(h) services provided by a race club by way of totalisator or a licence to ook maker in such club ; and |
[i] a strong feeling of suitability for a particular career or occupation
[ii] Bet
[iii] Totalisor is a computerised device that pools the wagers/bets (after deduction of charges and statutory taxes) of various persons placing the bet and also divides the total wager amount to be distributed to the winning persons.
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