## What is 'Goods' and What is 'Service'?
GST applies to supply of goods or services or both. So the first classification question is: is the subject matter goods or services?
### Definition of Goods – Section 2(52)
'Goods' means every kind of movable property other than money and securities, but includes:
- Actionable claim
- Growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply
Excludes: Money and Securities.
### Definition of Services – Section 2(102)
'Services' means anything other than goods, money and securities, but includes:
- Activities relating to use of money or its conversion by cash or by any other mode, from one form/currency/denomination to another (for which a separate consideration is charged)
- Facilitating or arranging transactions in securities
### Side-by-Side Snapshot
| Feature | Goods | Services |
|---|---|---|
| Nature | Movable property | Anything other than goods |
| Inclusions | Actionable claim, growing crops/grass severed before supply | Use of money (interest), currency conversion, securities facilitation |
| Exclusions | Money, Securities | Money, Securities (themselves) |
### Why Money & Securities are Excluded
Money and securities are mediums of exchange / financial instruments — taxing their transfer would be like taxing money itself. So:
- Issue of loan, deposit, bank guarantee, LC, CD, CP → mere transaction in money → NOT goods, NOT services.
- Activities AROUND money/securities (brokerage, transfer fee, commission, issuance charges) → Services (facilitation).
- Interest / discount → 'Use of money' → Services (but exempt under most situations).
### Meaning of Actionable Claim – Section 2(1)
A claim to:
- Any unsecured debt, or
- Any beneficial interest in movable property not in possession,
which a civil court would recognise as affording grounds for relief.
Examples: betting, gambling, lottery, insurance claim, unsecured book debts.
> ⚠️ Most actionable claims are in Schedule III (neither goods nor services) — except lottery, betting, gambling (which are goods and taxable).
### Meaning of Money – Section 2(75)
Indian or foreign currency, cheque, promissory note, bill of exchange, letter of credit, draft, pay order, traveller cheque, money order, postal/electronic remittance — recognised by RBI to settle obligations.
But excludes: Currency held for its numismatic value (i.e. as a collectible — that becomes 'goods').
### Treatment Table for Common Financial Items
| Item | Treatment |
|---|---|
| Loan principal repayment | Transaction in money — neither goods nor services |
| Interest on loan | Use of money — service (usually exempt) |
| Loan processing fee | Service (taxable) |
| Bank LC issuance charges | Service (taxable) |
| Sale of share by investor | Securities — neither goods nor services |
| Brokerage on share sale | Facilitation — service (taxable) |
| Buying-selling of foreign currency | Conversion — service (taxable, special valuation rules) |
| Old coin of antique value | Goods (numismatic value) |
### Role of Schedule II
In some cases, it is unclear whether a transaction is goods or services (e.g. works contract, restaurant). Schedule II specifies the classification.
### Role of Schedule III
Schedule III lists activities that are neither goods nor services, hence outside GST entirely.