Circular: An activity to agree to the obligation of any of the following shall be treated as supply of service

Analysis of Circular No. 178/10/2022 dated August 3, 2022

Background : In terms Entry 5(e) of Schedule II of the CGST Act, 2017 an activity for agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act shall be treated as supply of ‘service’.

 In simple words, an activity to agree to the obligation of any of the following shall be treated as supply of service:

• to refrain from an act; or
• to tolerate an act or a situation;
• to do an act.

Source Reema Sondhi

---

---