Q.What is discharge of a contract? State the various modes by which a contract may be discharged.

(a) A contract can come to an end (be discharged) in several ways — by performance, agreement, lapse of time, operation of law, impossibility and breach. (b) GST in India is levied in four forms — CGST, SGST, IGST and UTGST — depending on whether the supply is within a state, between states, or in a union territory.

(a) Ways (Modes) of Discharge of a Contract

Discharge of a contract means the ending of the contractual relationship between the parties. The main modes are:

1. Discharge by Performance — when both parties fulfil their obligations as agreed; this is the most natural mode. It may be actual performance or attempted performance (tender).
2. Discharge by Mutual Agreement or Consent — by fresh agreement between the parties, through:
   • Novation — substituting a new contract for the old one;
   • Rescission — cancelling the contract;
   • Alteration — changing the terms;
   • Remission — accepting lesser performance;
   • Waiver — giving up one's rights under the contract.
3. Discharge by Lapse of Time — if a contract is not enforced within the period fixed by the Limitation Act, the right to sue is lost.
4. Discharge by Operation of Law — through death, insolvency, merger or unauthorised material alteration of the document.
5. Discharge by Impossibility of Performance (Frustration) — when performance becomes impossible due to reasons beyond control (destruction of subject matter, change of law, death or incapacity in personal contracts).
6. Discharge by Breach of Contract — when a party fails or refuses to perform; it may be actual breach or anticipatory breach, giving the other party the right to remedies.

(b) Kinds of GST

Goods and Services Tax (GST) is a single, comprehensive indirect tax on the supply of goods and services in India, based on the principle of "one nation, one tax." It is levied in four kinds:

1. CGST (Central Goods and Services Tax) — collected by the Central Government on intra-state (within the same state) supplies.
2. SGST (State Goods and Services Tax) — collected by the State Government on intra-state supplies, along with CGST.
3. IGST (Integrated Goods and Services Tax) — collected by the Central Government on inter-state (between two states) supplies and on imports; it is later shared between the centre and the destination state.
4. UTGST (Union Territory Goods and Services Tax) — collected on intra-union-territory supplies (in union territories without a legislature), levied along with CGST.

Thus, on an intra-state sale both CGST and SGST/UTGST apply, while on an inter-state sale IGST applies.