# Schedule I – Supplies Without Consideration

Normally a transaction needs consideration to be a 'supply'. Schedule I lists exceptions — these are deemed supplies even without consideration.

## Items covered

1. Permanent transfer / disposal of business assets on which Input Tax Credit (ITC) has been availed.

Example: Disposing of an old company laptop on which ITC was claimed.

2. Supply of goods or services between related persons or distinct persons (e.g. between branches in different States having separate registrations) made in the course or furtherance of business.

However, gifts up to ₹50,000 per employee per FY by an employer are NOT treated as supply.

3. Supply of goods by a principal to his agent (or vice versa) where the agent supplies such goods on behalf of the principal.

4. Import of services by a taxable person from a related person or any of his other establishments outside India, in the course or furtherance of business.

## Memory device used in class

The shorthand 'Insurance / LGB / Job-work' is sometimes used as an aid to recall the most-tested fact patterns in MCQs:

Insurance premium paid by employer on behalf of employees — treated as a perquisite, not a Schedule-I supply (within ₹50,000 limit).
Land/Goods/Building (LGB) transferred between distinct persons of the same PAN crosses Schedule I.
Job work: goods sent by principal to a job worker are NOT a supply (specifically excluded by Section 143 read with Schedule I), provided the goods come back within the prescribed time.

Worked example

### Example 1

Q. Head office in Delhi transfers a server worth ₹3,00,000 to its branch in Bengaluru. Both are separately registered. Is this a supply?\nA. Yes — supply between two distinct persons (same PAN, different States) is covered by Schedule I, even without consideration. GST is payable on the value determined under valuation rules.

### Example 2

Q. An employer gifts a watch worth ₹40,000 to an employee on completion of 10 years. GST?\nA. Gift to an employee up to ₹50,000 in a FY is excluded — not a supply. No GST.

⚠️ Common exam mistakes

Forgetting that the ₹50,000 limit for employer-to-employee gifts is per employee per financial year, not per gift.
Treating job-work movement as a Schedule I supply — it is specifically excluded subject to time-bound return of goods.
Missing that import of services from a related foreign establishment is a supply even without consideration.

Bare-Act text Schedule I · CGST Act, 2017 · click to expand

Schedule I to CGST Act, 2017 — Activities to be treated as supply even if made without consideration: (1) Permanent transfer or disposal of business assets where input tax credit has been availed on such assets; (2) Supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business: Provided that gifts not exceeding fifty thousand rupees in value in a financial year by an employer to an employee shall not be treated as supply of goods or services or both; (3) Supply of goods — (a) by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal; or (b) by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal; (4) Import of services by a taxable person from a related person or from any of his other establishments outside India, in the course or furtherance of business.

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Schedule I – Activities Treated as Supply Even Without Consideration

Worked example

⚠️ Common exam mistakes