List of Services Exempted under Goods And Services Tax – GST Exempted Goods
Goods and Services Tax (GST) is a value-added tax levied on most goods and services sold for domestic consumption. It is paid by customers, but it is paid to the government by the businesses selling the goods and services. GST – Goods and Services Tax is a source of revenue for the government. It is an indirect tax levied on the supply of goods and services. The government has classified certain goods and services exempted under the GST Act 2017. The three types of GST in India are; Central Goods and Service Tax (CGST), State Goods and Services Tax (SGST), Union Territory Goods and Services Tax (UTGST), and Integrated Goods and Services Tax (IGST). Business owners cannot claim Input Tax Credit (ITC) for the sale of exempted goods and services. Exempt from tax refers to the supplies which attract the “Nil rate of Tax” or which may be wholly exempt from tax and also include non – taxable supply. Section II of the CGST Act and Section 6 of the IGST Act, gives the power to grant exemption from GST as well as the State Act consists the similar provisions relating to granting power to grant Exemption under GST.
Under the previous Indirect Taxation regime, taxpayers were enjoying large tax exemptions which are now limited under GST.
GST EXEMPTED GOODS
Here is the List of Services Exempted under Goods and Services Tax:
Exemption in Agricultural Services
Exemption in Agricultural Services: All services related to agriculture including cultivation, harvesting, packaging, renting, or leasing of machinery for agricultural purposes are exempted under the GST Act 2017. Also, services by any Agricultural Produce Marketing Committee or Board that is provided by an agent for the sale or purchase of agricultural produce are exempted under GST Act 2017. Farm equipment such as tractors, seeders, planters, and processing equipment also fall under this category.Process carried out at an agriculture farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter essential characteristics of agricultural produce but make it only marketable for the primary market are also exempted from GST Act 2017. The exemption also includes Services by any agricultural produce marketing committee or board of services provided by a commission agent for sale or purchase of agricultural produce and Services by way of loading, unloading, packing, storage or warehousing of rice.
Exemption in Food
Food items including cereals, edible fruits and vegetables which are not frozen or processed, edible roots and tubers, fish and meat which is not packaged or processed, tea leaves which are not processed, coffee beans which are not roasted, seeds, tender coconut, jaggery, ginger, turmeric, betel leaves, milk, and aquatic feeds, and supplements are exempted under GST Act 2017. But this list does not include items for dietary needs, such as snack foods, liquor, sodas, candy, etc.
Exemption in Raw Materials
Raw materials including Khadi fabric, raw jute fiber, firewood, charcoal, silk waste are exempted under the GST Act 2017.
Exemption in Tools and Instruments
The following tools and instruments are exempted under the GST Act 2017:
Hearing aidsimplements used by physically challenged people.
Hand tools including spades and shovels
Tools used for agricultural purposes
Handmade musical instruments
Exemption in Transportation Services
Transportation of goods where the gross amount charged is less than Rs. 1500, transportation of goods by inland waterways, transportation of agricultural produce, milk, salt, newspapers, or woodgrains, services provided to goods transport agencies and transportation of passengers by air in the states of Manipur, Tripura, Assam, Arunachal Pradesh, Meghalaya, Nagaland, Sikkim. Services of transportation of passengers, with or without accompanied belongings by metro, Monorail or Tramway, metered Cabs or Auto Rickshaws and Railway in a class other than First Class or Air-Conditioned coach are also exempted from the tax.
Exemption in Services provided by the government
Services by any foreign diplomatic mission located in India and Services provided by the Reserve Bank of India are exempted from GST Act 2017.
Services by the Government except Services related to an aircraft/vessel within or beyond the boundaries of a port or airport, 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 is exempted from GST Act 2017. List of services exempted from the GST Act 2017 under the category of transportation services also includes life insurance services provided under the National Pension System and by the Army, Naval, and Air Force Groups.
Exemption in Judicial Services
Services provided by an arbitral tribunal (i.e., services provided by the court or a judge) to any individual or to a business entity with a turnover up to Rs. 20 lakhs in the preceding financial year and 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 in the preceding financial year are exempted from GST Act 2017.
Exemption in Educational services
Exemption in Educational Services: Services including mid-day meal catering services, admission fees, examination services, housekeeping services are exempted from GST Act 2017. Services provided by Indian Institutes of Management are also exempted from GST Act 2017.
Exemption in Healthcare Services
Exemption in Healthcare services such as in Medical services and Prescription Drugs:
Following medical services have been exempted from the GST Act 2017:
1. Services provided by a veterinary clinic
2. Services provided by ambulances, charities
3. health-care services provided by clinics or paramedics
Most over the counter medications such as aspirin, vitamins, and minerals, cold remedies, bandages, etc. are not zero-rated and GST/HST must be charged. Services including artificial teeth or limbs, hearing aids, walkers, wheelchairs, contact lenses, asthmatic devices, insulin pumps, syringes, and pens, and urinary catheters, and feminine hygiene products such as tampons, sanitary napkins, etc also fall under this category.
Some medical procedures including preparing medical-legal reports or disability certificates, expert witness fees,are considered to be non-healthcare-related and as such are subject to GST. Other Exemptions from GST include Health care services provided by clinical establishments or medical practitioner or paramedics, Services provided by cord blood banks by way of preservation of stem cells or any other services in relation to such preservation and Services provided by Veterinary clinic in relation to health care of animals or birds.
MISCELLANEOUS GST EXEMPTED GOODS
Books, postal items, live animals, beehives, contraceptives, human blood, semen, bangles, chalk sticks, earthen pots, kites, organic manure, and vaccines are exempted under the GST Act 2017.
Services provided by recognized sports bodies, journalists, Press Trust of India, or United News of India are exempted from GST Act 2017. Also, Services provided by libraries and slaughterhouses are exempted from GST Act 2017. Also, GST is not imposed on services provided for public conveniences, such as washrooms, lavatories, urinals, and toilets.
In addition to the above-mentioned services, Services related to renting a property for residential purposes and renting rooms with charges less than Rs. 1000 per day are also exempted from the GST Act 2017.
Transportation services by a Goods Transport Agency in relation to the following goods are exempt from the tax –Goods where consideration charged for the transportation of goods on a consignment transported in a single carriage does not exceed one thousand five hundred rupees or Goods where consideration charged for transportation of all such goods for a single consignee does not exceed rupees seven hundred and fifty.
Services by way of a hotel, inn, guest house, club or campsite by whatever name called for residential or loading purposes, having declared tariff of a unit of accommodation below Rs 1000/- per day or equivalent is also exempted from GST.
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