(1) Supply includes—
(a) all forms of supply of goods and/or services such as sale, transfer, barter,
exchange, license, rental, lease or disposal made or agreed to be made for a
consideration by a person in the course or furtherance of business,
(b) importation of services, for a consideration whether or not in the course or
furtherance of business, and
(c) a supply specified in Schedule I, made or agreed to be made without a
(2) Schedule II, in respect of matters mentioned therein, shall apply for determining
what is, or is to be treated as a supply of goods or a supply of services.
(3) Notwithstanding anything contained in sub-section (1),
(a) activities or transactions specified in schedule III; or
(b) activities or transactions undertaken by the Central Government, a State
Government or any local authority in which they are engaged as public
authorities as specified in Schedule IV,
shall be treated neither as a supply of goods nor a supply of services.
(4) Subject to sub-section (2) and sub-section (3), the Central or a State
Government may, upon recommendation of the Council, specify, by notification,
the transactions that are to be treated as—
(a) a supply of goods and not as a supply of services; or
(b) a supply of services and not as a supply of goods; or
(c) neither a supply of goods nor a supply of services.