# Supply Between Related Persons or Distinct Persons
## Concept
Under Para 2 of Schedule I, supply of goods or services between related persons or between distinct persons, when made in the course or furtherance of business, is treated as supply even without consideration.
## Who are 'Related Persons' u/s 15?
Persons (including legal persons) are deemed related if:
1. They are officers or directors of one another's business
2. They are legally recognised partners
3. They are employer and employee
4. A third person controls/owns/holds (directly or indirectly) ≥ 25% voting stock/shares of both
5. One of them controls (directly/indirectly) the other
6. A third person controls both of them
7. They together control a third person
8. They are members of the same family
9. One is sole agent / sole distributor / sole concessionaire of the other
## Meaning of 'Family' [Section 2(49)]
- Spouse and children of the person; AND
- Parents, grandparents, brothers and sisters only if wholly or mainly dependent on the person.
## Distinct Persons u/s 25
- Section 25(4): A person obtaining more than one registration (in same State/UT or different) is treated as distinct person for each registration.
- Section 25(5): Establishment in one State + establishment in another State/UT = distinct persons.
- Explanation 1 to Sec 8 of IGST Act: Establishment in India + establishment outside India = distinct persons.
## Stock / Branch Transfers
| Situation | Treatment |
|---|---|
| Transfer between units under separate GST registrations (distinct persons) | Supply (even without consideration) |
| Transfer between two units under single registration | Not a supply |
## Employer–Employee Special Rules
- Services by employee to employer in the course of employment → outside scope of GST (Schedule III).
- Perquisites as per contractual agreement → not taxable.
- Gifts by employer to employee:
- Up to ₹50,000 per FY → Not treated as supply.
- Exceeding ₹50,000 (if in course or furtherance of business) → Treated as supply.