List of Goods & Services Exempt Under GST

Introduction

The Goods and Services Tax, GST is the indirect tax applicable in India on the purchase of goods and services. The GST Council is tasked with the responsibility of recommending to Unions and States on important issues, including the goods and services that are to be exempted from GST. Section 11 of the CGST Act and/or Section 6 of the IGST Act hold the power to exempt from tax. These Sections are amended by the Government on recommendations from the Council by way of Notifications, either absolutely or conditionally exempt either the whole or part of the tax. Special Order Exemptions are done so under circumstances of a unique nature, to be stated in the order. Example: Exemption in Public Interest.

Meaning of Exempted

Some specific goods and services are exempt from GST. This means that the sale or purchase of them would not attract the levy of GST. Exempt Supply can be in the form of:

• Nil-Rated Supply: This supply attracts a 'NIL' rate of GST. Not to be confused with Zero rated. Nil-Rated supplies can be taken to a higher GST rate by the Government at a later date.
• Supplies that are fully or partially exempt from GST by way of a notification amending Section 11 of the CGST Act or Section 6 of the IGST Act.
• Non-Taxable Supplies: Section 2(78) lists the goods that do not come under the ambit of GST as a whole. Example- Alcohol for Human Consumption.

Types of GST Exemptions

• Absolute Exemption: Exemptions that are available on the full amount and that are not conditional or restricted. Example: Any Services provided by the Reserve Bank of India
• Conditional Exemption: These exemptions have some kind of conditions, limits or restrictions to avail them. Example: Services by an artist by way of a performance in folk or classical art forms of music/ dance/ theatre, if the consideration charged for such performance is not more than Rs 1,50,000 is exempt.
• Partial Exemption: Unregistered persons who supply goods within the state, intra-state, to a registered person are exempt from GST under reverse charge only if the aggregate value of supply is not more than Rs 5000 per day.

GST Exemption from Registration

The following are not liable to register for GST:

• Persons engaged exclusively in supplying goods/ services/ both that are not liable to tax/ wholly exempt from tax are exempt from registration. Example: A person providing Funeral services that are not liable to GST shall be exempt from registration.
• Agriculturists' exemption is limited to the supply of produce out of cultivation of land.
• Persons making only reverse charge supplies.
• Persons making inter-state supplies of taxable services up to Rs 20 lakh**
• Persons making inter-state taxable supplies of notified handicraft goods and notified hand-made goods up to Rs 20 lakh**
• Casual Taxable Persons making inter-State taxable supplies of notified handicraft goods and notified hand-made goods up to Rs 20 lakh**
• Persons making intra-state supplies of goods through an ECO with aggregate turnover not exceeding threshold limit and not making supply in more than one State/UT, with one enrolment number.
• Persons making supplies of services through an ECO [other than supplies specified under section 9(5)] with aggregate turnover up to Rs 20 lakh**

** Rs 10 lakh in the case of Special Category States of Mizoram, Tripura, Manipur and Nagaland.

GST Exemption for Businesses

Small and medium-scale businesses can avail of GST exemptions if their aggregate turnover is up to a specified limit. These limits are as follows –

• Businesses and individuals who are supplying goods can claim GST exemption if their aggregate turnover is less than Rs 40 lakhs in a financial year. The limit is Rs 20 lakh for the States of Jammu and Kashmir, Assam, Himachal Pradesh, Arunachal Pradesh, Meghalaya, Sikkim, Uttarakhand, Puducherry and Telangana. The limit is Rs 10 lakh in the case of Special Category States of Mizoram, Tripura, Manipur and Nagaland. In the case of J&K, Assam and Himachal Pradesh the specific threshold limit is Rs 20 lakh for the supply of service/ both goods and service or Rs 40 lakh for only the supply of goods(Intra-state)
• For businesses and individuals involved in the supply of services, the limit for claiming GST exemption is less than Rs 20 lakhs in aggregate turnover. The limit is Rs 10 lakh in the case of Special Category States of Mizoram, Tripura, Manipur and Nagaland.

Exemption on Supply of Goods

Exemption on Supply of Service