GST Yathra- 15- Exemptions under GST

Section 11 of CGST Act and Section 6 of IGST Act provides that the government may grant exemption in respect of GST for goods and services as may be specified.

Following goods are exempt inter-alia:

Milk, Salt, Egg, Curd, Unpacked food grains, live fish, Fresh Milk, Potatoes, Grapes, Indian National flag, Plastic bangles

List of services exempt from CGST(Notification No. 12/2017) and IGST (Notification  No. 9/2017)

For the ease of memorising, they have categorised into 13 categories

A. Services to Government

3. Pure services to government

excluding Works contract or other composite supplies involving supply of any goods.

11A. Services by fair price shops under PDS to Central government

40. Services provided to the Central Government, State Government, Union territory under any insurance scheme for which total premium is paid by the Central Government, State Government, Union territory

43. Services of leasing of assets (rolling stock assets including wagons, coaches, locos) by the Indian Railways Finance Corporation to Indian Railways.

51. Services provided by the Goods and Services Tax Network to the Central Government or State Governments or Union territories for implementation of Goods and Services Tax.

59. Services by a foreign diplomatic mission located in India.

72. Services provided to the Central Government, State Government, Union territory administration under any training programme for which total expenditure is borne by the Central Government, State Government, Union territory administration.

B. Services by Government

4.   Services by Government by way of functions of Municipality

5.  Services by Government authority by way of functions of a Panchyat

6.  Services by Government excluding:

a)  Services by department of posts

b)  Services in relation to an aircraft or a vessel

c)  Transport of goods or passengers

d)        Any service to business entities.  

7.  Services by government to a business entity with an aggregate turnover of up to Rs. 20 lakh ( Rs. 10 lakh in respect of Special Category States)

However, the services specified in clause a, b, c of Entry to 6 and Renting of immovable property to any business entity are taxable

8. Services by government or local authority to another government or local authority (including the service by Central government to another Central government)

42. Services provided by the Central Government, State Government, Union territory or local authority by way of allowing a business entity to operate as a telecom service provider or use radio frequency spectrum during the period prior to the 1st April, 2016, on payment of licence fee or spectrum user charges, as the case may be.

47. Services provided by the Central Government, State Government, Union territory or local authority by way of-

(a) registration required under any law for the time being in force;

(b) testing, calibration, safety check or certification relating to protection or safety of workers, consumers or public at large, including fire license, required under any law for the time being in force

61. Services provided by the Central Government, State Government, Union territory or local authority by way of issuance of passport, visa, driving licence, birth certificate or death certificate.

62. Services provided by the Central Government, State Government, Union territory or local authority by way of tolerating non-performance of a contract for which consideration in the form of fines or liquidated damages is payable to the Central Government, State Government, Union territory or local authority under such contract.

63. Services provided by the Central Government, State Government, Union territory or local authority by way of assignment of right to use natural resources to an individual farmer for 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.

64. Services provided by the Central Government, State Government, Union territory or local authority by way of assignment of right to use any natural resource where such right to use was assigned by the Central Government, State Government, Union territory or local authority before the 1st April, 2016:

However, the exemption shall apply only to tax payable on one time charge payable, in full upfront or in installments, for assignment of right to use such natural resource.

65. Services provided by the Central Government, State Government, Union territory by way of deputing officers after office hours or on holidays for inspection or container stuffing or such other duties in relation to import export cargo on payment of Merchant Overtime charges.

C. Exemptions based on specified limits

9.   Services provided by government where the consideration doesn’t exceed Rs. 5,000/-

13.

a) Renting of rooms with charges of Rs.1,000/- or more per day

b) Renting of premises or open area with charges of Rs. 10,000/- or more per day.

c) Renting of shops or other spaces for business or commerce with charges of Rs. 10,000 or more per day

Whole text of Entry 13 has been specified under "Exemptions to support public welfare"

45. Services provided by-

(a)  an arbitral tribunal to –

(i) any person other than a business entity; or

(ii) a business entity with an aggregate turnover up to Rs. 20 lakh (Rs.10 lakh in the case of Special Category States) in the preceding financial year;

(b) a partnership firm of advocates or an individual as an advocate other than a senior advocate, by way of legal services to-

(i) an advocate or partnership firm of advocates providing legal services;

(ii) any person other than a business entity; or

(iii) a business entity with an aggregate turnover up to Rs. 20 lakh (Rs.10 lakh in the case of Special Category States) in the preceding financial year;

(c) a senior advocate by way of legal services to-

(i) any person other than a business entity; or

(ii) a business entity with an aggregate turnover up to Rs. 20 lakh (Rs.10 lakh in the case of Special Category States) in the preceding financial year.

77. Service by an unincorporated body or a non- profit entity registered under any law for the time being in force, to its own members by way of reimbursement of charges or share of contribution –

(a) as a trade union;

(b) for the provision of carrying out any activity which is exempt from the levy of Goods and Services Tax; or

(c) up to an amount of Rs. 5,000 per month per member for sourcing of goods or services from a third person for the common use of its members in a housing society or a residential complex.

D.Transport related

15.  Transport of passengers, by

a)      air, embarking from or terminating in an airport located in Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim or Tripura or at Bagdogra in West Bengal.

b)      Non-air conditioned contract carriages

However, the following services are taxable:

i)   Radio taxi

ii)  Transportation of passengers in tourism

iii)  Air conditioned stage carriage

16. Services to central government by way of transport of passengers by air embarking or terminating at a regional connectivity scheme airport

17. Transportation of passengers by

a)      Railways other than first class or air-conditioned coach

b)      Metro, monorail or tramway

c)      Inland waterways

d)      Public transport, other than predominantly for tourism purpose

e)      metered cabs or auto rickshaws

18. Transportation of goods-

a)   By road except the services of

i)   Good transportation agency

ii)   A courier agency

b)    By inland waterways

19. Transportation of goods by an aircraft from a place outside India upto the customs station of clearance in India.

20. Transportation by rail or a vessel from one place in India to another of the following goods

a)     relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap

b)      defence or military equipments

c)      newspaper or magazines registered with the Registrar of Newspapers

d)     railway equipments or materials

e)      agricultural produce

f)       milk, salt and food grain including flours, pulses and rice

g)      organic manure.

21. Services provided by a goods transport agency, by way of transport in a goods carriage of –

(a) agricultural produce;

(b) goods, where consideration charged for the transportation of goods on consignment transported in a single carriage does not exceed Rs. 1,500;

(c) goods, where consideration charged for transportation of all such goods for a single consignee does not exceed Rs. 750;

(d) milk, salt and food grain including flour, pulses and rice;

(e) organic manure;

(f) newspaper or magazines registered with the Registrar of Newspapers;

(g) relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap; or

(h) defence or military equipments.

22. Services by way of giving on hire –

(a) to a state transport undertaking, a motor vehicle meant to carry more than 12 passengers; or

(b) to a goods transport agency, a means of transportation of goods.

23. Service by way of access to a road or a bridge on payment of toll charges

E. Related to Insurance, Banking, Electricity sector

25. Transmission or distribution of electricity by an electricity transmission or distribution utility.

26. Services by the Reserve Bank of India

28. Services of life insurance business provided by way of annuity under the National Pension System regulated by the Pension Fund Regulatory and Development Authority of India under the Pension Fund Regulatory and Development Authority Act, 2013.

29. Services of life insurance business provided or agreed to be provided by the Army, Naval and Air Force Group Insurance Funds to members of the Army, Navy and Air Force, respectively, under the Group Insurance Schemes of the Central Government.

30. Services by the Employees’ State Insurance Corporation to persons governed under the Employees’ State Insurance Act, 1948.

32. Services provided by the Insurance Regulatory and Development Authority of India to insurers under the Insurance Regulatory and Development Authority of India Act, 1999.

33. Services provided by the Securities and Exchange Board of India set up under the Securities and Exchange Board of India Act, 1992 by way of protecting the interests of investors in securities and to promote the development of, and to regulate, the securities market

35. Services of general insurance business provided under following schemes –

(a) Hut Insurance Scheme;

(b) Cattle Insurance under Swarnajaynti Gram Swarozgar Yojna (earlier known as Integrated Rural Development Programme);

(c) Scheme for Insurance of Tribals;

(d) Janata Personal Accident Policy and Gramin Accident Policy;

(e) Group Personal Accident Policy for Self-Employed Women;

(f) Agricultural Pumpset and Failed Well Insurance;

(g) premia collected on export credit insurance;

(h) Restructured Weather Based Crop Insurance Scheme (RWCIS), approved by the Government of India and implemented by the Ministry of Agriculture;

(i) Jan Arogya Bima Policy;

(j) Pradhan Mantri Fasal Bima Yojana (PMFBY);

(k) Pilot Scheme on Seed Crop Insurance;

(l) Central Sector Scheme on Cattle Insurance;

(m) Universal Health Insurance Scheme;

(n) Rashtriya Swasthya Bima Yojana;

(o) Coconut Palm Insurance Scheme;

(p) Pradhan Mantri Suraksha BimaYojna;

(q) Niramaya Health Insurance Scheme implemented by the Trust constituted under the provisions of the National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999.

36. Services of life insurance business provided under following schemes-

(a) Janashree Bima Yojana;

(b) Aam Aadmi Bima Yojana;

(c) Life micro-insurance product as approved by the Insurance Regulatory and Development Authority, having maximum amount of cover of  Rs. 50,000;

(d) Varishtha Pension BimaYojana;

(e) Pradhan Mantri Jeevan Jyoti BimaYojana;

(f) Pradhan Mantri Jan DhanYogana;

(g) Pradhan Mantri Vaya Vandan Yojana.

27. Services by way of—

(a) extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount (other than interest involved in credit card services);

(b) inter se sale or purchase of foreign currency amongst banks or authorized dealers of foreign exchange or amongst banks and such dealers

34. Services by an acquiring bank, to any person in relation to settlement of an amount upto two thousand rupees in a single transaction transacted through credit card, debit card, charge card or other payment card service

F. Related to Pension, PF

31. Services provided by the Employees Provident Fund Organisation to the persons governed under the Employees Provident Funds and the Miscellaneous Provisions Act, 1952

37. Services by way of collection of contribution under the Atal Pension Yojana

38. Services by way of collection of contribution under any pension scheme of the State Governments.

G. Related to residential dwelling

12. Renting of residential dwelling

14. Service by a inn for residential purpose with declared tariff of Rs. 1,000 per day

11.Services by way of pure labour contracts  of construction, erection, commissioning or installation of original works pertaining to a single residential unit.

10.Services by way of pure labour contracts (Construction, renovation) under the Housing for All mission or Pradhan Mantri Awas Yojana.

H. To support public welfare

1. Services by an entity registered under section 12AA of the Income-tax Act, 1961 by way of charitable activities.

13.

a)      Services by a person by way of conduct of religious ceremony

b)      Renting of religious precincts owned by a charitable trust.

However, the following activities are taxable despite clause b.

a)      Renting of rooms with charges of Rs.1,000/- or more per day

b)      Renting of premises or open area with charges of Rs. 10,000/- or more per day.

c)      Renting of shops or other spaces for business or commerce with charges of Rs. 10,000 or more per day

49. Services by way of collecting or providing news by an independent journalist, Press Trust of India or United News of India.

50. Services of public libraries by way of lending of books, publications or any other knowledge-enhancing content or material.

60. Services by a specified organisation in respect of a religious pilgrimage facilitated by the Ministry of External Affairs, the Government of India, under bilateral arrangement.

76. Services by way of public conveniences such as provision of facilities of bathroom, washrooms, lavatories, urinal or toilets.

79. Services by way of admission to a museum, national park, wildlife sanctuary, tiger reserve or zoo.

I. To encourage entrepreneurship

2. Services by way of transfer of a going concern

44. Services provided by an incubatee up to a total turnover of  Rs. 50 lakh in a financial year subject to the following conditions, namely:-

(a) the total turnover had not exceeded Rs. 50 lakh during the preceding financial year; and

(b) a period of three years has not elapsed from the date of entering into an agreement as an incubatee.

39. Services by the following persons in respective capacities –

(a) business facilitator or a business correspondent to a banking company with respect to accounts in its rural area branch;

(b) any person as an intermediary to a business facilitator or a business correspondent with respect to services mentioned in entry (a); or

(c) business facilitator or a business correspondent to an insurance company in a rural area.

48. Taxable services, provided or to be provided, by a Technology Business Incubator or a Science and Technology Entrepreneurship Park recognised by the National Science and Technology Entrepreneurship Development Board of the Department of Science and Technology, Government of India or bio- incubators recognised by the Biotechnology Industry Research Assistance Council, under the Department of Biotechnology, Government of India.

69. Any services provided by, _

(a) the National Skill Development Corporation set up by the Government of India;

(b) a Sector Skill Council approved by the National Skill Development Corporation;

(c) an assessment agency approved by the Sector Skill Council or the National Skill Development Corporation;

(d) a training partner approved by the National Skill Development Corporation or the Sector Skill Council,

70. Services of assessing bodies empanelled centrally by the Directorate General of Training, Ministry of Skill Development and Entrepreneurship by way of assessments under the Skill Development Initiative Scheme.

52. Services by an organiser to any person in respect of a business exhibition held outside India.

41. One time upfront amount (called as premium, salami, cost, price, development charges or by any other name) leviable in respect of the service, by way of granting long term (30 years, or more) lease of industrial plots, provided by the State Government Industrial Development Corporations or Undertakings to industrial units.

J. To foster arts, culture and sports

53. Services by way of sponsorship of sporting events organised -

(a) by a national sports federation, or its affiliated federations, where the participating teams or individuals represent any district, State, zone or Country;

(b) by Association of Indian Universities, Inter-University Sports Board, School Games Federation of India, All India Sports Council for the Deaf, Paralympic Committee of India or Special Olympics Bharat;

(c) by the Central Civil Services Cultural and Sports Board;

(d) as part of national games, by the Indian Olympic Association; or

(e) under the Panchayat Yuva Kreeda Aur Khel Abhiyaan Scheme

9A. Services in relation FIFA U-17 Football World cup 2017

68. Services provided to a recognised sports body by-

(a) an individual as a player, referee, umpire, coach or team manager for participation in a sporting event organised by a recognized sports body;

(b) another recognised sports body.

78. Services by an artist by way of a performance in folk or classical art forms of-

(a) music, or

(b) dance, or

(c) theatre, if the consideration charged for such performance is not more than Rs.1,50,000. However, the exemption shall not apply to service provided by such artist as a brand ambassador.

80. Services by way of training or coaching in recreational activities relating to-

(a) arts or culture, or

(b) sports by charitable entities registered under section 12AA of the Income-tax Act.

81. Services by way of right to admission to-

(a) circus, dance, or theatrical performance including drama or ballet;

(b) award function, concert, pageant, musical performance or any sporting event other than a recognised sporting event;

(c) recognised sporting event, where the consideration for admission is not more than  Rs. 250 per person as referred to in (a), (b) and (c) above.

K. Related to Agriculture and other primitive sectors

24. Services by way of loading, unloading, packing, storage or warehousing of rice.

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—

(a) agricultural operations directly related

to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing;

(b) supply of farm labour;

(c) processes carried out at an agricultural 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 the essential characteristics of agricultural produce but make it only marketable for the primary market;

(d) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use;

(e) loading, unloading, packing, storage or warehousing of agricultural produce;

(f) agricultural extension services;

(g) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce.

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

56. Slaughtering of animals.

57. Services by way of pre-conditioning, precooling, ripening, waxing, retail packing, labelling of fruits and vegetables which do not change or alter the essential characteristics of the said fruits or vegetables.

58. Services provided by the National Centre for Cold Chain Development under the Ministry of Agriculture, Cooperation and Farmer’s Welfare by way of cold chain knowledge dissemination.

L. Related to education

66. Services provided -

(a) by an educational institution to its students, faculty and staff;

(b) to an educational institution, by way of,-

(i) transportation of students, faculty and staff;

(ii) catering, including any mid-day meals scheme sponsored by the Central Government, State Government or Union territory;

(iii) security or cleaning or house- keeping services performed in

such educational institution;

(iv) services relating to admission to, or conduct of examination by, such institution; upto higher secondary:

However, nothing contained in entry (b) shall apply to an educational institution other than an institution providing services by way of preschool education and education up to higher secondary school or equivalent

71. Services provided by training providers (Project implementation agencies) under Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDUGKY) implemented by the Ministry of Rural Development, Government of India by way of offering skill or vocational training courses certified by the National Council for Vocational Training.

67. Services provided by the Indian Institutes of Management, as per the guidelines of the Central Government, to their students, by way of the following educational programmes, except Executive Development Programme: -

(a) 2 year full time Post Graduate Programmes in Management for the Post Graduate Diploma in Management, to which admissions are made on the basis of Common Admission Test (CAT) conducted by the Indian Institute of Management;

(b) fellow programme in Management;

(c) 5 year integrated programme in Management.

M. Related to health care

46. Services by a veterinary clinic in relation to health care of animals or birds

74. Services by way of-

(a) health care services by a clinical establishment, an authorised medical practitioner or para-medics;

(b) services provided by way of transportationof a patient in an ambulance, other than those specified in (a) above.

75. Services provided by operators of the common bio-medical waste treatment facility to a clinical establishment by way of treatment or disposal of bio-medical waste or the processes incidental thereto.

73. Services provided by the cord blood banks by way of preservation of stem cells or any other service in relation to such preservation.

The above services are exempt from both CGST and IGST.

Whereas the following services are exempt from IGST only.

1. Services received from a provider of service located in a non- taxable territory by –

(a) the Central Government, State Government, Union territory, a local

authority, a governmental authority or an individual in relation to any purpose other than commerce, industry or any other business or profession;

(b) an entity registered under section 12AA of the Income-tax Act, 1961 for the purposes of providing charitable activities; or

 (c) a person located in a non-taxable territory.

However, the exemption shall not apply to –

1. online information and database access or retrieval services received by persons specified in entry (a) or entry (b); or
2.  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.

2. Services received by the RBI, from outside India in relation to management of foreign exchange reserves.

3. Services provided by a tour operator to a foreign tourist in relation to a tour conducted wholly outside India.

Other exemptions

1. Intra-State supplies received by a registered person from any unregistered supplier or suppliers exempt from CGST, provided the aggregate value of supplies does not exceed Rs.5,000 in a day
2. Intra- State supplies received under Section 51by a TDS deductor, who is not liable to get registered otherwise than under section 24(vi) are exempt.
3. All services imported by a unit/developer in the Special Economic Zone (SEZ) for authorised operations are exempt from the whole of the integrated tax leviable thereon under section 3(7) of the Customs Tariff Act, 1975 read with section 5 of the IGST Act, 2017

Zero Rated Supply (Section 16 of the IGST Act)

1. “Zero rated supply” means:

1. Export of goods or services or both or
2. Supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone Unit

1.  Input tax credit can be availed on zero-rated supplies unlike the case of exempt supplies.
2. The registered person making zero rated supply shall have following two options:

1. He may supply the goods without payment of Integrated tax and claim refund of the unutilized ITC or
2. He may supply the goods paying the Integrated tax after adjusting the ITC and claim refund of the tax as per Section 54 of the CGST Act

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For more details on Section 51 and Section 54, refer GST Yathra – (Will be updated)