04 August 2024
Under the Goods and Services Tax (GST) Act in India, the term **"goods not leviable under GST"** refers to goods that are either exempt from GST or are not covered under the GST law for various reasons. This can include specific exemptions, items subject to other tax laws, or items that are not considered as goods under the GST framework.
### **1. Goods Not Leviable Under GST:**
These goods can be categorized into two main types:
#### **A. Exempt Goods:** - **Definition:** Goods that are specifically exempt from GST either fully or partially. This means that no GST is charged on these goods, and they are not included in the GST tax structure. - **Examples:** - **Agricultural Produce:** Fresh fruits and vegetables, grains, milk, and eggs are generally exempt from GST. - **Educational Services:** Services provided by educational institutions to students. - **Healthcare Services:** Services provided by hospitals and clinics. - **Unprocessed Foods:** Certain unprocessed foods like cereals and pulses may be exempt. - **Export Goods:** Goods exported outside India are typically zero-rated, which means GST is levied at 0%.
#### **B. Goods Not Covered by GST:** - **Definition:** Goods that are outside the purview of GST and are subject to other specific tax laws or are not classified as goods under GST. - **Examples:** - **Petroleum Products:** While GST applies to most goods, petroleum products like petrol, diesel, and natural gas are currently taxed under VAT and are not covered under the GST Act. - **Alcohol for Human Consumption:** Alcoholic beverages are also outside the GST regime and are taxed under State Excise Laws.
### **2. Composition Dealers and Exempt Goods:**
Composition Scheme under GST is designed to simplify tax compliance for small businesses by allowing them to pay tax at a fixed rate on their turnover instead of the standard rates applicable under the regular GST scheme.
#### **Composition Scheme Rules:** - **Eligibility:** Composition dealers are typically small businesses with a turnover below a specified threshold. - **Restrictions:** Composition dealers are restricted from: - **Supplying Exempt Goods:** They are not allowed to supply goods that are exempt from GST. If a composition dealer supplies exempt goods, they will lose the benefit of the composition scheme. - **Claiming Input Tax Credit (ITC):** They cannot claim ITC on their purchases.
**Example:** - If a composition dealer is engaged in the sale of goods that are exempt from GST, such as fresh fruits and vegetables, they would not be eligible for the composition scheme and would need to opt for the regular GST scheme where they could claim ITC and would be required to charge GST on their taxable supplies.
### **Summary:**
- **Goods Not Leviable Under GST:** These include exempt goods (e.g., agricultural produce, certain educational and healthcare services) and items outside the GST purview (e.g., petroleum products, alcoholic beverages). - **Composition Dealers:** They cannot supply exempt goods and must comply with regular GST provisions if they wish to engage in such activities.
For accurate application and understanding, businesses should consult the GST law, relevant notifications, and professional advice specific to their circumstances.
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