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Important IFRS meaning and definitions

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• As per Section 2(5) the term “agent” means a person, including a factor, broker, commission agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another.

1. any trade, commerce, manufacture, profession, vocation,
adventure, wager or any other similar activity.
2. supply or acquisition of goods including capital goods and services in connection with commencement or
closure of business;
3. provision by a club, association, society, or any such body of the facilities or benefits to its members.

• As per Section 2(19) , the term “capital goods” means goods, the
value of which is capitalised in the books of account of the person
claiming the input tax credit and which are used or intended to be
used in the course business.

• As per Section 2(20) the term “casual taxable person” means a person who occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business.

• As per Section 2(30) of the Central Goods and Services Tax (CGST) Act, 2017,the term “composite supply” means a supply made by a taxable person, consisting of two or more taxable supplies of goods and services, which are naturally
bundled and supplied in conjunction with each other in the ordinary course of business.
Illustration: Where goods are packed and transported with
insurance, the supply of goods, packing materials, transport
and insurance is a composite supply and supply of goods is a
principal supply.

• Section 2(66) defines this term as “mixed supply” means two or more
individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply.
• A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other.

• “outward supply” in relation to a taxable person, means supply of goods or services or both, whether by sale, transfer, exchange,
licence, rental, lease or disposal or any other mode, made or agreed to be made by such person in the course or furtherance of business.

• principal supply” means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that  is ancillary.

• “supplier” in relation to any goods or services or both, shall mean the person supplying the said goods or services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or services or both supplied.

• “Input Service Distributor” means an office of the supplier of
goods or services or both which receives tax invoices issued under
section 31 towards the receipt of input services and issues a
prescribed document for the purposes of distributing the credit of
central tax, State tax, integrated tax or Union territory tax paid on
the said services to a supplier of taxable goods or services or both
having the same
Permanent Account Number as that of the said office.

• manufacture” means processing of raw material or inputs in any manner that results in emergence of a new product having a
distinct name, character and use and the term “manufacturer” shall be construed accordingly.

• “input tax” in relation to a registered person,  meanst central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him and
• (a) the integrated goods and services tax charged  on import of goods;
(b) the tax payable under the provisions of sub-sections.

• input tax credit is the credit manufacturer’s received for paying input taxes towards inputs used in the manufacture of products.
Similarly, a dealer is entitled to input tax credit if he has purchased goods for resale.

• works contract” means a contract for building, construction, completion , installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any
immovable property wherein transfer of property in goods.

• “Inward supply” in relation to a person, shall  mean receipt of goods or services or both  whether by purchase, acquisition or any other means with or without consideration.

  1. Karthick D says

    HI SIR I NEED entrepreneur development important question

    1. BUStudymate says

      Important questions will be updated 1 day before the exam

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