What does Business mean in terms of Law?

Section2(17)) “Business” Includes:-

(1) Any trade, commerce manufacture, profession, vocation adventure, wager or any other similar activity, Whether or not it is for a pecuniary benefit;

(2) Any activity or transaction in connection with or incidental or ancillary to sub-clause (a);

(3) Any activity or transaction like sub-class (a), Whether or not there is volume, frequency, continuity or regularity of such transaction;

(4) Supply or acquisition of goods including capital goods and services in connection with commencement or closure of business;

(5) The provision by a club, association, Society or any Such body (for a subscription or any other consideration) of the facilities or benefits to its members;

(6) Admission, for a consideration, of persons to any Premises;

(7) Services supplied by a person as the holder of an office Which has been accepted by him in the courses of furtherance of his trade, profession or vocation;

(8) Activities of a race club including by way to totalisator or a license to bookmarker or activities of a licensed bookmaker in such club; and

(9) Any activity or transaction is undertaken by the Central Government, a State Government, or any local authority in which they are engaged as public authorities. The definition of “business” is an inclusive definition.

Following Points emerge from the definition of “business”

• Profit Motive irrelevant.

• Occasional Transactions are subject to GST.

• Incidental or ancillary activities taxable:

For example, Sales of a used car, sale of Scrap, Sale of Scrap, Sale of old Machinery, Sale of Furniture, etc. is subject to GST, normally the taxable person may not be in the business of selling cars, Furniture or Machinery.

• Government activities subject of GST:

Section 2(17) (i) of the CGST Act states that ‘Business’ includes any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as Public authorities. Thus, excluding Sovereign activities of the state, all activities of Government is ‘business’. However, some of their activities as public authority Will be specifically excluded from the Scope of GST by issuing notification Under Section 7(2) (b) of the CGST Act on the recommendation of GST Council. Thus, unless specifically excluded by a notification, their activities will be liable to GST.

• Sovereign activities not subject to GST:

Activities like Dispensing, Justice, Maintaining armed Forces, Conducting audit by C&AG, elections to parliament, or State Legislatures are ‘Sovereign activities’ as no other person can do it.

• Trade Means exchange of goods for money. E.g. Mr. A brought Rs.10,000 X-mas Tree and sold in his locality for Rs.20,000. It is trade.

• Commerce Refers to large Volume of trade through there is no specific Scale When trade is termed as commerce.

• Vocation refers to calling or how an individual passes his life. This term refers to activities such as sports, art not taken as a profession but for recreation or pleasure.