# Schedule-I: Supply without Consideration
Under GST, supply normally requires consideration. Schedule-I lists four exceptions — activities deemed to be supply even when no consideration flows.
## The Four Schedule-I Entries
### (1) Permanent Transfer or Disposal of Business Assets
Treated as supply only if ITC was availed on such assets.
- If ITC was taken → permanent transfer/disposal = supply (even free).
- If ITC was not taken → not a supply.
### (2) Supply between Related or Distinct Persons
Deemed supply if both conditions hold:
- Supply is between related persons or distinct persons, AND
- Made in the course or furtherance of business (of the supplier).
### (3) Principal–Agent (Goods only)
Deemed supply where goods are supplied by principal to agent (or vice versa) and the invoice is issued in the name of the agent.
- Invoice in agent's name → falls under Schedule-I.
- Invoice in principal's name → does NOT fall under Schedule-I.
- Applies only to goods, not services.
### (4) Importation of Services from Related Person
Deemed supply if both:
- Service received from a related person or other establishment outside India, AND
- Received in the course or furtherance of business of the recipient.
## Import of Service – Decision Tree
| Situation | Supply? |
|---|
| Import with consideration, for business or non-business | Always Supply |
| Import without consideration, from related person, for business | Supply |
| Import without consideration, otherwise | Not Supply |
## Sales Promotion Schemes
| Scheme | Treatment |
|---|
| Free Sample / Gift | No consideration → no supply, unless covered under Schedule-I (ITC availed) |
| Buy One Get One | Two supplies for a single price → entire transaction is supply |
### Example 1
Q. ABC Ltd. purchased an AC for office and availed ITC. Later transferred it free of cost to its subsidiary. Is it a supply?
A. Yes. Permanent transfer of business asset on which ITC was availed → Schedule-I Para (1). Supply even without consideration.
### Example 2
Q. Mr. Gaurav (electronics dealer) gifts a motor car free of cost to a customer. No ITC was taken on the car. Is it a supply?
A. Not a supply. No consideration, and ITC not availed → Schedule-I Para (1) not attracted.
### Example 3
Q. Mr. Hari distributes free samples to prospective customers. Supply?
A. Not a supply if no ITC taken. If ITC was availed on the samples, then it becomes supply under Schedule-I Para (1).
### Example 4
Q. A Ltd. transfers stock from its Mumbai manufacturing unit to its Gujarat retail outlet (both registered). Supply?
A. Yes — supply between distinct persons in the course of business → Schedule-I Para (2). Supply even without consideration.
### Example 5
Q. Mr. Ram, an architect, provides architectural services to his wife. Supply?
A. Yes — spouse is always a related person; service is from his profession (course of business) → Schedule-I Para (2).
### Example 6
Q. Mr. Shyam (event manager) provides event services to his brother for a family function. Supply?
A. Supply only if the brother is dependent on Shyam (siblings are related persons only if dependent).
### Example 7
Q. Mr. Hari obtained architectural services from his son in London — (a) for his new home, (b) for his real-estate business project. No consideration paid. Taxability?
A. (a) Service for home → not for business → not a supply. (b) Service for real-estate project → from related person, for business → supply under Schedule-I Para (4).