Exempt Supplies under GST
Detailed Analysis of Exemptions provided under GST
EXEMPT SUPPLIES UNDER GST - DETAILED ANALYSIS
Under GST law, there are various exemptions available for which no GST is payable by the person.
Here we will look at all the aspects of exemptions available under GST
As per Section 11 of the CGST Act and Section 6 of the IGST Act, the Govt. by way of notification or section order exempts any class of services from the GST.
The exemption can be provided generally or subject to such conditions as may be prescribed or it may be for goods and services which are specified in the notification.
The exemption by way of special order can be with regard to circumstances that are of special nature and which are in the public interest.
Now we take a look at various services that have been exempt so far by way of notifications etc. under GST:
1. Agriculture Related Services
Under agriculture services, the following services have been exempt :
(a) Loading, unloading, packing, storage, or warehousing of rice
(b) All kinds of agriculture-related services such as the cultivation of plants and rearing of animals (except horses) for food, fiber, fuel, raw material, or any similar products or agriculture produce by way of :
(i) agriculture operations including cultivation, harvesting, threshing, plant protection, testing etc.
(ii) Supply of farm labour
(iii) processes that are carried out at agriculture farms which does not change the essential character of agricultural produce
(iv) renting or leasing of vacant land or agro machinery
(v) loading, unloading, storage, packing, or warehousing of agricultural produce
(vi) agriculture extension services
(vii) services of fumigation of agricultural produce in a warehouse
(c) Artificial insemination of livestock (other than horses)
(d) Services relating to storage/warehousing of cereals, pulses, spices, fruits, nuts, vegetables, sugarcane, jaggery, cotton, flax, jute, indigo, remanufactured tobacco, beetle leaves, tendu leaves, coffee, and tea.
(e) Warehousing of minor forest produce
2. Charitable and Religious Activities
Under this category, the following services are exempt from GST :
(a) All charitable activities carried out by institutions registered u/s 12AA of the Income Tax Act
(b) Services relating to conducting of Religious ceremonies :
(c) Services relating to renting of premises or religious places owned by an entity registered under section 23AA/10(23)(c)(v) or 10(23)(BBA) of the Income Tax Act.
However, in the following cases, it will not be exempt :
(i) If the charges of room rent are >=1000 per day
(ii) If the charges of renting of premises, hall, mandap, open area, etc. is >=10000 per day
(iii) If charges of renting of shops/ spaces for business etc. >=10000 per month
(d) Training/coaching relating to arts/culture in recreational areas or sports by Charitable entities registered under section 12AA of the Income Tax Act.
(e) Services by a Specified organization in respect of a religious pilgrimage i.e. (Haj Committee/KMVN carrying on HAJ yatra/Kailash Mansarovar Yatra)
3. Services relating to Education :
Under this category, the following services are exempt from GST :
1. Services provided by any Educational Institution :
(a) to its students and staff ;
(b) services relating to conducting entrance exams for a fee
(c) Services relating to the conduct of examination and admission by an Educational Institution;
(d) Supply of online educational journals and periodicals by an educational institution providing services by way of education for obtaining a qualification recognized by any law for the time being in force;
(e) Services provided to an educational institution by way of ;
(i) transportation of students, staff, or faculty;
(ii) catering and mid-day meal schemes sponsored by the Central/State Govt;
(iii) security/cleaning/housekeeping services performed in Educational Institution;
(However, these services are exempt only if they are provided to an Educational Institution that is up to higher secondary school or equivalent)
4. Services relating to Health Care
In this category, the following services are exempt :
(a) All Health Care services by any Clinical Establishment or by an authorized medical practitioner or by paramedical;
(b) Transportation of patients in an ambulance;
(c) Stem Cell preservation;
(d) Services relating to Health care of animals/birds by any Veterinary Clinic.
5. Construction-related Services
Under this category of Services, the following are exempt services :
(a) All pure labor contract services relating to construction, erection, commissioning, repairing maintenance, renovation, or alteration of any civil work in respect of individual residential houses or under Pradhan Mantri Awas Yojana.
(b) Pure labor contracts of construction, erection, installation, or commissioning of single residential units that are not part of residential complexes.
(c) Supply of long-term lease, TDR, etc. of land by the landowner to the developer subject to the condition that the flats should be sold before the issue of completion certificate. If the flats are sold after the issue of the completion certificate, GST @ 1% of the value of affordable houses and 5% of the value in other cases will have to be paid.
6. Services relating to Transportation of Passengers (with or without belongings)
The following services relating to the transportation of passengers will be exempt :
(a) Services provided by a Stage carrier provided it is not air-conditioned;
(b)Services provided by non-airconditioned contract carriage (other than radio taxi) for transportation of passengers other than for tourism, conducted tour, hire, or charter;
(c) Services provided by air from an airport located in Northeastern state or terminating in it or at Bagdogra in West Bengal;
(d) Services provided by railways other than in air-conditioned or first-class coach;
(e) metro monorail etc.;
(f) Services provided by inland waterways;
(g) services provided by public transport (not for tourism) anywhere in India;
(h) services provided by metered cabs or autorickshaws (including e-rickshaws)
7. Services relating to Goods Transportation
Under this category following services will be exempt :
(a) Any services relating to the transportation of goods by road are exempt except the services relating to:
(i) Goods transportation services
(ii) Courier Services
(b) Services provided by a GTA to an unregistered person are also exempt except in the following cases :
(i) A Factory registered under the Factory Act;
(ii) Society Registered under Societies Act;
(iii) Co-operative Society;
(iv) body co-operate;
(v) partnership firm;
(vi) a registered casual taxable person
(c) In case of the following goods transported by rail/vessel or by a goods transport agency, the same will be exempt :
(i) Agriculture produce;
(ii) organic manure;
(iii) newspaper or magazine;
(iv) milk, salt, food grains, pulses and rice;
(v) Defence ministry equipment;
(vi) relief materials meant for victims of disaster, calamities, accidents or mishaps
8. Banking and Finance Services
The following services under this category are exempt :
(a) any service provided by RBI;
(b) Services of providing loans, deposits, or advances to the extent that the consideration is received by way of interest; or discounts (however interest on credit card services is taxable);
(c) Services relating to the sale or purchase of foreign currency amongst bank or authorized foreign exchange dealers ;
(d) Services provided by the bank to basic account holders under Pradhan Mantri Jan Dhan Scheme;
9. Life Insurance Business Services
The following services are exempt under this category :
(a) Services of annuity under NPS by PFRDI under the PFRDA Act, 2013
(b) Services by Arny, Naval, and Air Force Group Insurance Funds to its members
(c) Services provided under the following schemes :
(i) Aam Aadmi Bima Yojna
(ii) Varishtha Pension Bima Yojna
(iii) Pradhan Mantri Jeevan Jyoti Bima Yojna
(iv) Pradhan Mantri Jan Dhan Yojna
(v) Pradhan Mantri Vaya Vandan Yojana
(vi) Janashree Bima Yojana
(vii) Life micro-insurance products up to maximum insurance cover of Rs.200000 as approved by IRDA
10. Legal Services
(a) Services provided by :
(i) Arbitral Tribunal;
(ii) Partnership firm or an individual advocate ;
(iii) Senior advocate by way of legal services
To :
(i) any person other than a business Entity
(ii) Business entity with an aggregated turnover up to such amount in the preceding Financial year as makes it eligible for exemption from registration under the GST Act
(iii) Central Government/ State Govt. /Union Territory/Local Authority etc.
(b) Legal Services provided by a partnership firm of advocates/individual advocate (other than a senior advocate) to another advocate /partnership firm of advocates providing legal services.
11. Services by an Artist
Any services provided by an artist by way of performance in classical or folk art forms of music/dance/theatre provided that the total consideration is less than Rs.150000. However, if the performances are provided as a brand ambassador this exemption is not available.
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