Broad definition of ‘Business’ :
The definition of ‘business’ is inclusive definition.
Following points emerge from the definition of ‘business’ —
Prof it motive irrelevant – Profit motive is immaterial.
Occasional transactions are subj ect to GS T – Business normally implies something done on regular basis. However, since business includes ‘Adventure’, occasional transactions may also be covered. Adventure implies some ‘speculation’.
Incidental or ancillary activities taxable – Incidental or ancillary business is also covered.
For example, sale of used car, sale of scrap, sale of old machinery, sale of old furniture etc. is subj ect to GST, though normally the taxable person may not be in business of selling cars, furniture or machinery.
In Member, Board of Revenue v. Controller of Stores AIR 1989 SC 1468 = (1989) 74 STC 5 (SC), it has been held that any activity which is incidental or ancillary to the main business also constitutes business and thereby the person engaged in such business becomes a dealer (‘taxable person’ under GST Act).
In following cases, transaction was held as incidental to business.
Sale of unserviceable parts by transport undertaking – In State of Orissa v. Orissa Road Transport . Ltd. 107 STC 204 = 1997 AIR SCW 3489 = AIR 1997 SC 3409 (SC 3 member bench), it was held that State transport undertaking is liable to tax on sale of its un-serviceable, old and obsolete parts. – similar view in Controller of Stores, Northern Railway v. A CTO – AIR 1976 SC 489 = (1976) 37 STC 423 (SC).
Sale of scrap – In State of Tamilnadu v. Burmah Shell Oil Co AIR 1973 SC 1045 = 31 STC 426 (SC), it was held that sale of scrap as well as sale of advertisement material at cost price was connected with business of assessee and turnover in respect of these commodities was exigible to tax.
Sale of old machinery and scrap by manuf acturer – Sale of old unserviceable machinery and scrap by manufacturer is incidental to his business – State of Orissa v. Steel A uthority of India Ltd. (2011) 44 VST 50 = 7 GST 552 (Ori HC DB).
Sale in store f or employ ees – In State of Tamilnadu v. Binny Ltd. (1982) 49 STC 17 (SC), sale effected in stores maintained by company as a welfare measure for employees was held as incidental to main business and hence taxable.
Sale of pledged goods by Banks – Sale of pledged goods by Bank is in the course of banking business – Federal Bank Ltd. v. State of Kerala (2007) 6 VST 736 (SC).
Sale of old newspap er and waste p ap er – In Indian Express P Ltd. v. State of Tamilnadu (1987) 67 STC 474 (SC), it was held that sale of old and unsold copies of newspaper by newspaper publisher is ‘incidental’ to main business.
In The Hindu v. State of Tamil Nadu (1987) 67 STC 477 (SC), it was held that sale of glazed newsprint (during the period publication was stopped), old newspapers, print waste and cut waste are sales ‘incidental or ancillary’ to the main business of printing and publishing and liable to sales tax.