What consideration means under GST

The definition in plain terms

Section 2(31) of the CGST Act covers any payment made or to be made, in money or otherwise, in respect of or in response to a supply, whether by the recipient or any other person. It also includes the monetary value of any act or forbearance. It specifically excludes subsidies given by the Central or a State Government.

• Barter: goods given in exchange for other goods are a supply with non-monetary consideration.
• A non-compete fee is consideration for agreeing to refrain from an act.
• A deposit is not consideration when received, but becomes consideration once the supplier applies it towards the supply.
• Payment by a third party, such as an insurer paying a garage, is still consideration for the garage.

Supplies taxed even without consideration

Schedule I to the CGST Act lists cases treated as supply even where nothing is charged. These include permanent transfer or disposal of business assets on which input tax credit was availed, supplies between related persons or distinct persons in the course of business, certain supplies between a principal and agent, and import of services from a related person or own establishment outside India. Gifts by an employer to an employee up to Rs. 50,000 in a year are not treated as a supply.

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This guide explains the law in general terms as of October 2026. Time limits and requirements can depend on the facts of your case and on the notice you received.