GSTR-9C Table 5D: Deemed Supply Under Schedule I

GSTR explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

This is the one adjustment with no source document to start from. Deemed supplies do not appear in a revenue ledger, do not have a return line of their own, and often do not appear in the accounts at all. The Guide's instruction is blunt: look beyond the books.

Table 5D adds "Aggregate value of deemed supplies under Schedule I of the CGST Act", with the qualification that "Any deemed supply which is already part of the turnover in the audited annual financial statement is not required to be included here." It was optional for FY 2017-18 to FY 2021-22, with adjustments reportable in Table 5O.

Why it is hard to find

"As the requirement of this Sl. No. is to report the transactions which were not reported in the financial statements, though the same are reported in the returns filed since they are treated as deemed supplies… there is no direct source which will indicate the value of deemed supplies under any part of the returns or statements filed. Details regarding this have to be extracted from the books/records."

And the Guide's practical route:

• "E-Way bills raised would be a good guiding factor to identify such instances in respect of goods. For instance, transactions relating to stock transfer of goods may be extracted from delivery challans or on an analysis of e-way bills, whereas transactions of service transfers will be based on an understanding of the nature of business."
• "Since this information may not be readily available from books, it might be relevant to design the verification program to include possible deemed supply transactions."
• "The registered person should look beyond the books of accounts and look for alternative evidence and information."

1. Permanent transfer or disposal of business assets

Where ITC has been availed, the transfer is a supply "even if made without any consideration."

"Business assets" is undefined, so "The application of the rule of literal construction comes into play… if the literal meaning of the language used is clear and unambiguous… interpretation should adhere to this literal construction. The term 'business assets' encompasses a broad spectrum, including all assets associated with the business, such as capital goods, finished goods, raw materials, tools, or equipment."

And only two of the eight forms of supply are caught: "Among the 8 forms of supply, only 'transfer' or 'disposal' fall within the scope of supply under this category."

Examples given: "disposal of business assets to NGO without consideration, physician sample distributed by a pharmaceutical company to a physician for free, assets taken by proprietor on completion of their useful life."

Including pre-GST assets: "Where such assets have been procured under the old law and have been discarded, destroyed, transferred or disposed of in the GST regime, then the transaction would be deemed to be one of supply and attract levy."

Where to look: "inventory records, fixed assets schedule as well as expenses in the marketing/sales promotion ledgers. In relation to Fixed Assets, all the discarded/sale of assets would find mention in the disposal of assets column in the Fixed Assets Register/Schedule."

And the boundary with free supplies generally, per Circular No. 92/11/2019-GST dated 07.03.2019: "goods or services or both which are supplied free of cost (without any consideration) shall not be treated as 'supply' under GST (except in case of activities mentioned in Schedule I)." Free samples and Schedule I Entry 1 →

2. Related and distinct persons

The employee gift proviso, and a condition on it: gifts "not exceeding fifty thousand rupees in value in a financial year by an employer to an employee shall not be treated as supply." But "Registered person must also remember to determine whether such a gift is a unilateral act of the employer to an employee. It should not be relatable to the terms of employment or supply. For example, a software engineer who has achieved a particular milestone, may be gifted a car (which is not relatable to the terms of employment). Such a transaction would be one of deemed supply."

Intra-company transactions are the largest item here:

"Intra-company transactions such as stock transfer, which are taxed… in case of inter-State supplies or between different business locations within the same State where separate registration has been obtained… The effect of these transactions gets nullified at the consolidated financial statement level and, therefore, identifying and reporting of such transactions for reconciliation purpose would require special attention."

And a valuation note that decides whether effort is needed: "Valuation for stock transfers would not be an issue so long as the tax paid by the supplier on such stock transfers qualify as input tax credit in the hands of the receiving branch. However, if the tax paid… does not qualify as input tax credit, valuation in terms of section 15 read with rules 27 to 35 would have to be factored." Rule 28 and the full-ITC proviso →

3. Principal and agent

Supply of goods by a principal to his agent where the agent supplies on his behalf, or by an agent to his principal where he receives on his behalf.

The reporting consequence is substantial:

"In case of consignment or agency transactions, the reporting… is to be reflected as outward supplies in the hands of the principal and as inward supplies in the hands of the consignee — and not just commission earned by the agent."

And the tax rate follows the goods, not the service: "Although this is a commission transaction in books of account, it is required to be treated as trading transaction for GST purposes. Please note that rate of tax indirectly applicable to the commission (involved in the price differential earned by agent) will be taxed at the rate applicable to the underlying goods and not at the rate applicable to commission service."

"The value of commission would have to be separately mentioned by the agent through a separate invoice."

So an agent's books show commission income while his GST returns show gross trading turnover — a permanent, and often large, reconciling item.

4. Import of services from a related person

"Import of services may not get recorded in the books of accounts on accrual basis since such transactions are with related persons. But such an inference could be drawn on a perusal of the past transactions, wherein such expenses have been incurred on a regular basis."

The Guide's illustrations: "Transfer of machinery from Agra branch to Bengaluru branch without consideration for indefinite usage in production activity"; "An architect located in New Jersey, USA may provide services to say his brother who is a builder in India"; and "Foreign branch supplying manpower to the head office."

The last is the Northern Operating Systems territory — a secondment or manpower arrangement between establishments of the same person outside and inside India, taxable under Schedule I paragraph 4. Secondment and Northern Operating Systems →

Key takeaways

• Table 5D adds deemed supplies under Schedule I that are not already in audited turnover.
• There is no direct source in the returns — use e-way bills, delivery challans, fixed asset registers and marketing ledgers.
• Entry 1 catches permanent transfer or disposal of business assets on which ITC was availed — including assets bought pre-GST and physician samples; only transfer and disposal, not the other six forms of supply.
• Entry 2 catches intra-company stock transfers, which net off in consolidated accounts and so must be looked for deliberately.
• The ₹50,000 employee gift proviso requires the gift to be a unilateral act not relatable to the terms of employment.
• Entry 3 requires the full value of consignment transactions to be reported by principal and agent, not merely commission, and taxed at the rate of the underlying goods.
• Entry 4 catches imports of services from related persons and foreign establishments, often never accrued in the books.
• Circular No. 92/11/2019-GST: free supplies are not supply except where Schedule I applies.

Read next

• GSTR-9C Table 5M: Valuation Adjustments Under Section 15
• GSTR-9C Table 5O: The Residual Adjustment Row
• Schedule I Entry 2: Stock Transfers in the FMCG Supply Chain

Disclaimer: Positions stated as on 5 September 2026, based on Form GSTR-9C and its instructions, sections 7, 15 and 25 of the CGST Act, 2017, Schedule I thereto, rules 27 to 35 of the CGST Rules, 2017 and Circular No. 92/11/2019-GST dated 7 March 2019, as reproduced in the ICAI Technical Guide on GST Reconciliation Statement (Form GSTR-9C).