The document summarizes various exemptions from GST in India, including:
1. Certain goods like live animals, meat, fish, vegetables and fruits are exempt from GST. Common items like sugar, drugs, fertilizers and national flags are also exempt.
2. Many essential services are exempt, including health care, education services up to higher secondary level, religious ceremonies, charitable activities, and pension schemes.
3. Agriculture-related services like warehousing of farm goods, fumigation, crop services and transport are exempt from GST.
4. The government has power to grant exemptions from GST if deemed necessary for public interest.
3. Legends Used
3
CG Central Government
CGST Central Goods and Service Tax
EI Educational Institution
FY Financial Year
GST Goods and Services Tax
ITA Income Tax Act, 1961
SG State Government
SGST State Goods and Service Tax
UT Union Territory
VAT Value Added Tax
5. Introduction
5
When a supply of goods and/or services falls within the purview of charging
section, such supply is chargeable to GST.
However, for determining the liability to pay the tax, one needs to further
check whether such supply of goods and/or services are exempt from tax
Under GST, essential goods/services, i.e. public consumption products /
services, have been exempted
Therefore, it is essential to understand the provisions for exemptions from GST
6. Non-Applicability of GST
6
Specific
Exclusions from
Definition of
Supply – Sec 7(2)
of CGST act
Non-applicability
of Charging
Section – Sec 9 of
CGST Act
Persons other
than taxable
Person
Exemptions
Supply of Goods and Services which do not meet the conditions of supply definition shall also
not be liable to GST. Only complete exclusion from the definition are discussed in this webinar
7. Exclusions from the Definition of Supply
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Services by an employee to the employer in the course of or in relation to his employment
Services by any court or Tribunal established under any law for the time being in force
The functions performed by the Members of Parliament, Members of State Legislature, Members of Panchayats,
Members of Municipalities and Members of other local authorities
The duties performed by any person who holds any post in pursuance of the provisions of the Constitution in that capacity
The duties performed by any person as a Chairperson or a Member or a Director in a body established by the CG or a SG or
local authority and who is not deemed as an employee before the commencement of this clause
Services of funeral, burial, crematorium or mortuary including transportation of the Deceased
8. Non-applicability of Charging Section
8
Supply of alcoholic liquor for human consumption
GST shall not be chargeable on:
GST currently not leviable on (leviable if notified):
Supply of
• Petroleum crude,
• High speed diesel,
• Motor spirit (commonly known as petrol),
• Natural gas and
• Aviation turbine fuel
However, Taxes are charged by respective states
Currently, Central excise, cess and state VATs are being levied
9. Person Other than Taxable Person
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As per the Charging Section, GST is to be levied and paid only by a Taxable Person
under Sec 22 (Persons liable for Registration) or Sec 24 (Mandatory Registration in certain cases)
Taxable Person means a person who is registered or liable to be registered
Persons Liable for Registration – Sec 22
Threshold limit of registration
Every supplier of goods or services or both is required
to obtain registration in the State or UT from where he
makes the taxable supply if his aggregate turnover
exceeds
-Rs. 20 lakhs or
-Rs. 10 lakhs, if the person is carrying out
business in Special Category States of
Mizoram, Tripura, Manipur and Nagaland
However, as per Notification No. 10/2019 CT dated 07.03.2019 exempts any person who is engaged in exclusive supply of
goods and whose aggregate turnover from the FY 19-20 does not exceed Rs. 40 lakh, from registration requirement
10. 10
The category of persons requiring compulsory registration under GST are:
Persons making any inter-State taxable supply
Threshold limit of Rs. 20 lakh (Rs. 10 lakh in case of Special Category States of Mizoram, Tripura, Manipur and Nagaland) is available in
case of inter-state supply of taxable services and of notified handicraft goods ( 33 items including leather, bamboo, handmade toys etc.)
Casual taxable persons* (CTP) making taxable supply
Threshold limit of Rs. 20 lakh (Rs. 10 lakh in case of Special Category States of Mizoram, Tripura,
Manipur and Nagaland) is available in case of inter-state supply of notified handicraft goods
Compulsory Registration in Certain Cases - Sec 24
Non-resident taxable persons making taxable supply
Every Electronic Commerce Operator (ECO) who is required to collect tax at source
Persons who make taxable supply of goods or services or both on
behalf of other taxable persons whether as an agent or otherwise
Every person supplying online information and data base access or retrieval (OIDAR) services
Persons who are required to pay tax under reverse charge (tax to be paid by recipient of service)
* CTP means a person who occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance
of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business
11. Exempt Supply
11
Exempt supply
(Sec 2(47) of
CGST Act)
means supply of any goods or services or both
which attracts nil rate of tax or which may be wholly exempt
from tax under Sec 11, or under Sec 6 of the IGST Act,
and includes non-taxable supply
12. Power to Grant Exemption
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Power to grant exemption from GST has been granted vide Sec 11 of the CGST
Act and vide Sec 6 of the IGST Act (identical provisions)
State GST laws also contain identical provisions granting power to exempt SGST
with effect from such date as may be specified in such notification
from the whole or any part of the tax leviable thereon
goods or services or both of any specified description
by notification, exempt generally, either absolutely or subject to such conditions as may be specified therein,
on the recommendations of GST Council,
Where the Government is satisfied that it is necessary in the public interest so to do, it may,
Sub-section (1)
13. Power to Grant Exemption
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exempt from payment of tax any goods or services or both on which tax is leviable
under circumstances of an exceptional nature to be stated in such order,
by special order in each case,
it may, on the recommendations of GST Council,
Where the Government is satisfied that it is necessary in the public interest so to do,
• The Government if it considers necessary or expedient so to do
• for the purpose of clarifying the scope or applicability of any notification or order,
• insert an explanation at any time within one year of issue and
• every such explanation shall have effect as if it had always been the part of the first such
notification or order
Sub-section (2)
15. Goods Exempt from GST
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Under GST, everyday items used by the common man have been included in the list of exempted items
Live animals Meat Fish Natural products
Live trees and
plants
Vegetables Fruits Dry fruits
Tea, coffee and
spices
Grains
Products of the
milling industry
Seeds
Some of the common items out of total 149 items of the list are mentioned below:
16. Goods Exempt from GST
Sugar Water Baked goods Fossil fuels
Drugs and
pharmaceuticals
Fertilizers Beauty products Waste Ornaments Newsprint
Printed items Fabrics Hand tools Pottery National Flag
17. Services Exempt from GST
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Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017
&
Notification No. 12/2017 Integrated Tax (Rate) dated 28.06.2017
Entry Numbers mentioned in this presentation refer to entry numbers in the first-mentioned notification
18. Services Exempt under IGST
Apart from the Exemptions common with CGST, there are few
additional services which have been exempted only under IGST law
Services received from a provider of service located in a non- taxable territory by –
CG / SG / UT / Local Authority /
Govt. Agency / An individual in
relation to any purpose other
than commerce, industry or any
other business or profession
an entity registered under section
12AA of the Income- tax Act, 1961
for the purposes of providing
charitable activities
way of supply of online educational
journals or periodicals to an educational
institution other than an institution
providing services by way of-
pre-school education
and education up to
higher secondary school
or equivalent; or
education as a part of
an approved
vocational education
course
A person located
in non-taxable
territory
the exemption shall not apply to –
• Online information and database access or retrieval (OIDAR) services received by above mentioned CG/SG/UT Individual etc. or trust or
• Services by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India
received by persons specified in the entry.
* Non taxable territory means a territory outside the taxable territory
Taxable territory – territory to which the provisions of the act apply
19. Services Exempt under IGST – Contd.
Services received by the RBI,
from outside India in relation to
management of foreign
exchange reserves.
Services provided by a tour
operator to a foreign tourist in
relation to a tour conducted
wholly outside India.
Import of services by UN or a
international organisation for
official use of UN or the
international organisation.
Services supplied by an establishment of a
person in India to any establishment of
that person outside India, which are
treated as establishments of distinct
persons provided the place of supply of
the service is outside India.
Import of services by Foreign
diplomatic mission or consular
post in India, or diplomatic agents
or career consular officers
• A ltd India providing services to A ltd USA (subsidiary)
• Treated as distinct persons under GST – chargeable to tax
• However, exempt if place of supply is outside India
20. Services Exempt from GST
• Lets discuss a portion of the exempted services from the notification
• Various entries are clubbed together based on their nature
22. 22
Entry 1 of the Notification exempts services provided by an entity registered under Sec 12AA of the ITA by way of charitable activities
Exempts the following services by a person by way of
Conduct of any religious ceremony
Renting of precincts of a religious place meant for general public, owned/managed by
institutions/entities/trusts, registered under Sec 12AA/10(23C)(v) of the ITA or
body/authority covered under section 10(23BBA) of ITA, except where
Charges for renting of rooms ≥ Rs 1,000 per day
Charges for renting of premises, community halls, kalyanmandapam, open area, etc. are ≥ Rs. 10,000 per day
Charges for renting of shops/spaces for business/commerce are ≥ Rs. 10,000 per month
Services by a specified organisation [KMVN/Haj Committee] in respect of a
religious pilgrimage [Haj and Kailash Mansarovar Yatra]
Training/coaching in recreational activities relating to
(a) arts/culture, or
(b) Sports
by charitable entities registered under Sec 12AA of the ITA
Entry 13
Entry 60
Entry 80
23. 23
Meaning of Charitable Activities
The term ‘charitable activities’ mean activities relating to
Public Health
A. Care or counseling of
- Terminally ill persons or persons with severe physical or mental disability
- Persons afflicted with HIV or AIDS
- Persons addicted to a dependence-forming substance such as narcotics drugs or alcohol
B. Public awareness of preventive health, family planning or prevention of HIV infection
Advancement of Religion, spirituality or yoga
Advancement of Educational programmes/ skill development relating to
Abandoned, orphaned or homeless children;
Physically or mentally abused and traumatized persons;
Prisoners;
Persons over the age of 65 years residing in a rural area
Preservation of Environment including watershed, forests & wildlife
25. 25
Entry 24 Services by way of loading, unloading, packing, storage or warehousing of rice
Services by way of warehousing of minor forest produceEntry 24A
Services by way of fumigation in a warehouse of agricultural produceEntry 53A
Entry 55
Carrying out an intermediate production process as job work in relation to
- cultivation of plants and rearing of all life forms of animals, except the rearing of horses
- for food, fibre, fuel, raw material or other similar products or agricultural produce
Entry 54
Services relating to cultivation of plants and rearing of all life forms of animals, except the rearing of
horses, for food, fibre, fuel, raw material or other similar products or agricultural produce by way of:
Agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant
protection or testing;
Supply of farm labour;
Processes carried out at an agricultural farm including tending, pruning, etc. and such like operations which do not alter the essential
characteristics of agricultural produce but make it only marketable for the primary market
Renting or leasing of agro machinery or vacant land with/without a structure incidental to its use;
Loading, unloading, packing, storage or warehousing of agricultural produce;
Agricultural extension services;
Services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale/purchase of
agricultural produce.
Services by way of fumigation in a warehouse of agricultural produce
Services by way of loading, unloading, packing, storage or warehousing of rice
Fumigation is a technique that employs various chemicals (fumigants) to eliminate pests and insects
Minor forest produce means all non-timber forest produce of plant origin and will include bamboo, canes, fodder,
leaves, gums, waxes, dyes, resins and many forms of food including nuts, wild fruits, Honey, Lac, Tusser etc
26. 26
Educational Services
Entry 66 exempts the following services provided by an Educational Institution (EI)
To its students, faculty and staff;
By way of conduct of entrance examination against consideration in form of entrance fee
Services provided to an EI, by way of
Transportation of students, faculty and staff;
Catering, including any mid-day meals scheme sponsored by the CG, SG or UT
Security or cleaning or house-keeping services performed in such EI;
Services relating to admission to, or conduct of examination by, such EI
Supply of online educational journals or periodicals.
These exemptions are only applicable to an
institution providing services by way of pre-
school education & education up to higher
secondary school or equivalent
Educational Institution means an institution providing services by way of,-
(i) Pre-school education and education up to higher secondary school or equivalent;
(ii) Education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force;
(iii) Education as a part of an approved vocational education course
27. 27
Health Care Services
Entry No. 46 Services by a veterinary clinic in relation to health care of animals or birds
Entry No. 74
Services by way of-
-Health care services by a clinical establishment, an authorised medical practitioner or para-medics;
-Transportation of a patient in an ambulance by any person other than specified above
Entry No. 73 Services provided by the cord blood banks by way of preservation of stem cells or any other service in
relation to such preservation
Pension Schemes
Services by way of collection of contribution under:
•Atal Pension Yojana
•Any pension scheme of SG
Entry 37 and 38
28. 28
Business Facilitator/Correspondent
Business facilitator or a business correspondent to a banking company with respect to
accounts in its rural area branch;
Any person as an intermediary to a business facilitator or a business correspondent with
respect to services mentioned above
Business facilitator or a business correspondent to an insurance company in a rural area
Entry No. 39
Services by the following persons in respective capacities
Business Correspondents and Business facilitators are representatives of a bank, responsible for
building awareness, sourcing prospective customers. In addition, business correspondents are also
responsible for carrying out banking transactions for existing customers
