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Non-application of GST is called GST exemption. The exemptions under GST is granted in 3 cases:
The article talks about the exemption under GST in depth.
Table of Contents
Exemptions under GST mean that the supply does not attract goods & services tax. In simpler words, no GST is charged on the supply of these goods or services exempted under GST.
The ITC paid on these supplies will not be utilized.
The types of supplies that are exempted under GST are:
There are 2 types of exemptions specified under the GST Act:
Exemptions under GST from registration:
Exemptions under GST for businesses
Small or medium scale businesses whose aggregate turnover as per the 32nd GST council meeting held in January 2019 are:
List of goods that do not attract GST recommended by the GST council.
Here is a list of some of the most common goods which are GST exempt:
Types of goods
Fresh or frozen
Honey, milk, cheese, eggs, etc.
Onions, potatoes, etc.
Apples, bananas, etc.
Oil seeds, flower seeds, etc.
Jaggery, sugar, etc.
Pizza base, bread, etc.
Tender coconut water, mineral water, etc.
Walnuts, cashew nuts, almonds, etc.
Cows, sheep, goat, etc.
Live trees & plants
Roots, flowers, foliage, etc.
Wheat, oats, rice, etc.
Tea, coffee & spices
Turmeric, tea leaves, coffee beans, etc.
Milling industry products
All kinds of flour
Raw silk, khadi etc.
Clay, lamps, earthen pots, etc.
Hammer, spade, etc.
Drugs & pharmaceuticals
Human blood, contraceptive, etc.
Municipal waste, etc.
Kajal, bindi, etc.
Plastic & glass bangles, etc.
Newspapers, books, etc.
Envelopes, judicial stamp papers, etc.
Here is a list of the services which enjoy GST exemption:
Types of services
· Warehouse related activities
· Renting or lending agricultural machinery, etc.
· Portal services
· Transportation services for people or goods
· Services by the foreign diplomat in India
· RBI’s services in India, etc.
Services offered by:
· Arbitral tribunal
· Partnership firm of advocates
· Senior advocates
· Individual or business entities whose turnover is Rs. 40 lakhs, etc.
· Transportation of faculty or students
· Mid-day meal
· Examination services
· Services offered by IIMs, etc.
· Medical professionals
· Veterinary doctors, etc.
Services offered by :
· Exhibition organizer for international business exhibitions
· Tour operators, etc.
· Transportation of goods
· Toll payment
· Passenger’s transportation by air
· Goods transportation (where the cost of transport is less than Rs. 1500, etc.)
The Government can implement exemptions under GST on the following grounds:
The amount of credit as accountable to exempt the supplies must be reversed. Let us see how to determine the credit accountable to the supplies exempted.
Credit accountable to supplies exempted = (A / T) * C
A = Aggregate value of exempt supplies (it includes all supplies other than taxable & zero-rated supplies)
T = Total turnover of the person in the tax period
C = Common Credit
A non-taxable supply means a supply of goods or services that does not come under GST law. There must be a supply of goods or services or both to have qualified under the non-applicability of GST. The supplies that are excluded from the scope of GST must be covered within this definition.
For example alcoholic liquor for human consumption, articles listed in section 9(2) or Schedule III.
It is important to note that certain items are not out of the scope of GST. The GST rate for such items has not been announced or notified.
Non-application of GST is called exemptions under GST.
The exemption under GST is granted in 3 cases; businesses or individuals, goods and services.
As per the 32nd GST council meeting held in 2019, the exemptions under GST can be when the threshold limit has been changed to Rs. 40 lakhs for businesses & individuals and hilly areas & north-eastern states, it is 20 lakhs.
The threshold limit for services has been changed to Rs. 20 lakhs and for hilly areas & north-eastern states, it is 10 lakhs.
Read our article:GST Exemption: Agriculturist and Small Traders
Completed BA LLB from JEMTEC, School of Law, Greater Noida (Affiliated to GGSIP University, New Delhi). I have an experience of about 2 years in various fields of corporate laws, but I have a keen interest in researching on legal issues and to gain knowledge. I always strive to bring the best to work on what I do.
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