Exemptions in GST

The government has classified certain goods and services as exempt from GST. Unlike with zero-rated goods and services, business owners cannot claim ITC for the sale of exempted goods and services. Here’s a list of all the exemptions:

Exempted goods:

 

Food

Cereals, edible fruits and vegetables (not frozen or processed), edible roots and tubers, fish and meat (not packaged or processed), tender coconut, jaggery, tea leaves (not processed), coffee beans (not roasted), seeds, ginger, turmeric, betel leaves, papad, flour, curd, lassi, buttermilk, milk, and aquatic feeds, and supplements.

Raw materials

Raw silk, silk waste, wool (not processed), khadi fabric, cotton used for khadi yarn, raw jute fiber, firewood, charcoal, and handloom fabrics.

Tools/Instruments

Hearing aids, hand tools (such as spades and shovels), tools used for agricultural purposes, handmade musical instruments, and aids and implements used by physically challenged people.

Miscellaneous

Books, maps, newspapers, journals, non-judicial stamps, postal items, live animals (except horses), beehives, human blood, semen, bangles, chalk sticks, contraceptives, earthen pots, props used in pooja (including idols, bindi, kumkum), kites, organic manure, and vaccines.

Exempted services:

 

Agricultural services

This includes all services related to agriculture except the rearing of horses. Exempt services include cultivation, harvesting, supply of farm labor, fumigation, packaging, renting or leasing of machinery for agricultural purposes, warehouse activities, and services by an Agricultural Produce Marketing Committee or Board that is provided by an agent for the sale or purchase of agricultural produce.

Transportation services

  • Transportation service by road or bridge on payment of toll; transportation of goods by road (except when carried out by transportation agency or courier agency).
  • Transportation of goods by inland waterways.
  • Transportation of passengers by air (in the states of Manipur, Meghalaya, Assam, Arunachal Pradesh, Nagaland, Sikkim, Tripura, and Bagdogra).
  • Transportation by non-AC horse or contract carriages; transportation of agricultural produce, milk, salt, newspapers, or woodgrains.
  • Transportation of goods where the gross amount charged is less than Rs. 1500.
  • Hiring services provided to any state transport undertaking, including motor vehicles with a capacity to carry more than 12 passengers; services provided to goods transport agencies.

    Services provided by the government and diplomatic missionaries

  • Services by any foreign diplomatic mission located in India.
  • Services provided by the Reserve Bank of India.
  • Services by the Government or any local authority except the following services:
    • Services by the Department of Posts via speed post, express parcel post, life insurance, and agency services provided to any individual other than the government.
    • Services related to an aircraft/vessel within or beyond the boundaries of a port or airport.
    • Transportation of goods or passengers.
    • Any other service, except those that come under (a) and (b), that is provided to business entities.
  • Services provided to diplomats, including the United Nations.
  • Life insurance services provided under the National Pension System; life insurance provided by the Army, Naval and Air Force Groups.

    Judicial services

  • Services provided by an arbitral tribunal (i.e., services provided by the court or a judge) to any individual other than a business entity or to a business entity with a turnover up to Rs. 20 lakhs (Rs. 10 lakhs for special category states) in the preceding financial year.
  • Services provided by a partnership firm of advocate(s) to: an advocate or partnership firm of advocates, any individual that is not a business entity, or a business entity with a turnover up to Rs. 20 lakhs (Rs. 10 lakhs for special category states) in the preceding financial year.
  • Services provided by a senior advocate (legal services) to any individual other than a business entity or to a business entity with a turnover up to Rs. 20 lakhs (Rs. 10 lakhs for special category states) in the preceding financial year.

    Educational services

  • Transportation of students and faculty, mid-day meal catering services, admission, examination services, and security and housekeeping services.
  • Services provided by Indian Institutes of Management (except the Executive Development Programme).

    Medical services

  • Services provided by a veterinary clinic; health-care services provided by clinics or paramedics.
  • Services provided by ambulances, charities, and organizations facilitating religious pilgrimage.

    Services provided by organizers

  • Services provided by organizers for business exhibitions held outside India.
  • Services provided by tour operators to foreign tourists (this includes tours that are conducted completely outside India).

    Miscellaneous  services

  • Transmission or distribution of electricity by authorized personnel.
  • Services provided by recognized sports bodies.
  • Services provided by journalists, Press Trust of India, or United News of India. This includes the collection and provision of news.
  • Services provided by slaughterhouses.
  • Services provided by libraries.
  • Services provided for public conveniences, such as washrooms, lavatories, urinals, and toilets.
  • Services provided for conducting religious ceremonies, including renting the premises of any religious place.

    New exemptions that have been added:

     

  • Services provided by the GSTN to the Central government, State government, and Union Territories.
  • Services related to renting property for residential purposes and renting rooms with charges less than Rs. 1000 per day.
  • Admission to circuses, theatrical performances, award ceremonies, sport events (other than recognized sport events), and admission to recognized sport events which charge less than Rs. 250/- per person for registration. This also includes admission services for museums, national parks, wildlife sanctuaries, zoos, etc.

To know more about the services exempted from GST, view CBEC’s official list.

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