List of Goods & Services Exempt Under GST

Some commodities are subject to 5% GST, while others are subject to 12%, 18%, or 28%. Certain commodities, however, are free from GST. All GST-registered items are listed using Harmonised System of Nomenclature, or HSN code. Each product is assigned HSN code number to ensure that GST invoicing methods adhere to worldwide product nomenclature standards.

Understanding taxability also entails understanding whether or not item is excluded from GST. scope of taxable supplies has been expanded under GST, & GST exclusions have been explicitly stated. Knowing exemption list is crucial, but so is comprehending implications of item being exempt, since certain criteria apply, such as reversing ITC. GST regime exempts wide variety of essential items, making list of goods & services exempt under GST quite comprehensive. This includes basic necessities like fresh produce, unprocessed grains, & public transportation services. Government of India provides  list of goods exempt under GST to keep essential items affordable for consumers. This list includes basic necessities like fresh fruits & vegetables, cereals, milk, & more. Businesses supplying these exempt goods don't charge GST, but they also cannot claim input tax credit (ITC) on purchases related to those goods.

Businesses can benefit from referring to list of goods & services exempt under GST to identify products & services they can supply without charging GST. However, it's important to remember that ITC (input tax credit) cannot be claimed on purchases related to these exempt items. Staying updated on list of goods & services exempt under GST is crucial for businesses to ensure they comply with tax regulations & avoid any potential errors in their GST filings.
 

What is GST exemption?

GST exemption indicates that specific supply of goods & services is on GST exemption list & that customer is not required to pay GST on such goods & services. GST registration was not required for firms with revenue of up to Rs.20 lakh, or Rs.10 lakh for businesses operating in several North-eastern states like as Jammu & Kashmir, Uttarakhand, Himachal Pradesh, Arunachal Pradesh, Nagaland, Mizoram, Sikkim, Meghalaya, Manipur, & Assam. GST exemptions refer to certain items or services that are excluded from GST. 

In other words, certain products & services are not covered by GST Act. These exemptions change over time & vary by nation. government can issue exemptions for variety of reasons, including reducing tax burden on vital products & services or assisting certain industries. For comprehensive understanding of GST exemptions in India, explore GST exemption list, which includes list of goods & services exempt under GST, list of exempted services under GST notification, details on GST free products, & might even specify HSN codes for certain exempt goods.
 

Types of Exemption

Following types of GST exemptions apply:

Conditional: Some exemptions apply only under particular conditions, such as services provided by clubs, hotels, & so on that include accommodation unit costing less than Rs.1000 per day.

Partial: If total value of supply does not exceed Rs.5000 per day, any unregistered person delivering products to registered individual inside state can take advantage of partial tax exemptions under reverse charge.

Absolute: Services exempt from GST without any limitations, such as RBI services.
 

What is Exempt Supply

Following is list of supplies that are exempt under GST:

• Under CGST or SGST, partial or whole exemption on supply 
• Supplies taxed at nil or zero percent 
• Under Section 2(78), supplies are excluded from GST.

Note: input tax credit for these suppliers cannot be applied.

Here's list of supplies & their respective meanings:

• Zero-rated: Supplies are exported to developers of Special Economic Zones (SEZs).
• Nil rating: Non-GST supplies, like salt, are taxed 0%.
• Not covered in scope of GST law, such as alcohol for human consumption
• Exempt: Supplies, such as curd & fruit, are taxed but do not incur GST.
 

List of GST Exemptions on Goods

GST Exemption for Startups & Small Businesses

Following are items to note if individuals wishing to create business & benefit from GST exemptions:

-If small business's income is less than Rs.5 crore, it can use quarterly filing scheme.

-Business is recognized as GST. -Exempt business if revenue is less than Rs. 40 lakhs.
Small businesses are free from e-invoicing under GST, however they may be required to register for e-invoicing if their revenue exceeds Rs.50 crore.

-If firm has annual aggregate revenue of less than Rs.1.5 crore, it can take advantage of GST composition plan, while individuals would pay tax at set rate ranging from 1.00% to 6.00%.
GST Exemption from Registration

Here is list of types of taxpayers who have not registered for GST:

- Those supplying items under reverse charge  
- Persons supplying non-GST goods & services 
- Farmers 
- Taxpayers engaged in other activities 
- Exempt providers of goods & services.
-Individuals exempted from GST registration who fall below threshold exemption limit.
 

List of GST Exemption on Services

Here is list of GST exempted services in India:

-Foreign diplomatic & governmental services
- Farm labour supply - Services provided by IRDAI, RBI, NPS, Central & State Governments, & others.
-Services like as pre-conditioning, waxing, & retail packaging.
-Auto rickshaws, public transit, metered taxis, subway, & so forth.
- transportation of agricultural produce & goods outside of India
-Goods transported with charges less than Rs.1500.
-Under Pradhan Mantri Jan-Dhan Yojana (PMJDY), financial services including Basic Saving Bank Deposit (BSBD) accounts are functional.
-Ambulance & charitable services, as well as healthcare & educational services including mid-day meal catering, VET clinics, & paramedics, are excluded from GST. 
-Agricultural services are free from GST & include storage, cultivation, harvesting, packing, supply, machinery leasing, horse raising, & so on.
-Sports organizations, tour guides, religious rituals, & libraries are excluded from GST.
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Exempt supply under GST

Exempt supplies under GST are those that do not attract goods & services tax. There is no GST levied on these supplies. Input tax credits for these supplies cannot be applied. There are three categories of exempt supply: 

- Supplies subject to zero rate tax. notices that altered section 11 of CGST & section 6 of IGST exempted suppliers from GST charges, both partially & completely.

-Supplies falling under Section 2(78) of Act, which includes supplies that are not taxed under Act, such as alcoholic liquor for human use.
 

GST exemption from registration

- Agriculturists - Individuals with turnover threshold of INR 40 lakhs for products, INR 20 lakhs for services, & INR 20 lakh & INR 10 lakh for certain categories. (In special category states)

-A person who provides NIL-rated & exempt goods & services such as fresh milk, honey, cheese, agricultural services, & so forth.

- individual engaged in activities that are not covered by delivery of goods & services, such as burial services & petroleum products.
-A person who supplies commodities that are subject to reverse charge, such as tobacco leaves, cashew nuts (not shelled & peeled), & so on.
 

GST exemption for businesses

Small & medium-sized firms that have aggregate turnover of up to certain amount are eligible for GST exemptions. restrictions are as follows:

Businesses & individuals that provide goods can seek GST exemption if their total revenue is less than INR 40 lakhs in fiscal year.

- limit has been raised to INR 20 lakhs for India's hilly & north-eastern states.

-For enterprises & people involved in supply of services, maximum for obtaining GST exemption is INR 20 lakh.

-In hilly & north-eastern states, firms & individuals delivering services with aggregate revenue of up to INR 10 lakhs can seek GST exemptions.
 

GST exemptions for goods

GST Council has approved list of commodities that do not attract GST. reasons for granted exemption on products may include any of following.

Exemption is based on GST Council's suggestion & serves public interest.

Exemptions may be given by government by special order or through official notification for certain commodities.

Furthermore, there are two sorts of GST exemptions for items. They are as follows:

Absolute exemption - Under this form of exemption, delivery of particular types of commodities is exempt from GST regardless of supplier or receiver's details or whether items are delivered within or outside State.

Conditional exemption - Under this form of exemption, supply of selected types of products is GST exempt subject to certain restrictions & conditions provided in GST Act or any modification or notification.
 

GST Exemption on services

particular services, like particular items, are exempt from GST. There are three categories of services that are eligible for GST exemption. This includes following:

- Supplies with 0% tax rate.

- Supplies exempt from CGST or IGST due to notice amending Section 11 of CGST Act or Section 6 of IGST Act. -

Non-taxable supplies as specified in Section 2(78) of GST Act.
Because certain supplies are GST exempt, any Input Tax Credit due to them cannot be used to offset GST payment.

Furthermore, even for delivery of services, there might be two sorts of GST exemptions, which are as follows:
-Absolute exemption, which exempts service from GST without any constraints.

-Conditional exemption or partial exemption, in which exemption is given subject to certain conditions. This condition indicates that if service is provided intra-State or by registered person to unregistered person, GST is excluded if total value of such supplies received by registered person does not exceed INR 5000 per day.
 

Difference between Exempt, Nil Rated, Zero Rated & Non-GST supplies

In framework of India's Goods & Services Tax (GST) system, there are many categories that specify various tax treatments for supply. categories are: "Exempt," "Nil Rated," "Zero Rated," & "Non-GST Supplies." Each group has specific implications for GST application. Below is summary of distinctions between these categories:

Exempt supplies:
GST Applicability: Exempt supplies are not subject to GST. This implies that no GST is levied on value of supply, & provider is unable to claim input tax credit (ITC) for GST paid on goods & services used to create exempt supply.
-eg. Certain necessary commodities & services, such as fresh fruits & vegetables, milk, & healthcare services delivered by clinical facility, are usually excluded from GST.

Nil-rated supplies
- GST Applicability: Its not subject to GST, although unlike exempt supply, they are taxed at 0% rate. Nil-rated supplies do not impose any GST duty on provider, although supplier may claim input tax credit for GST paid on inputs & services.
-Ex: Exports of goods & services, such as medications & some agricultural items, are frequently designated as nil-rated supply.

Zero-rated supplies
-GST Applicability: like nil-rated supplies, are subject to 0% GST charge. However, zero-rated supplies only apply to exports of goods & services. Suppliers of zero-rated suppliers may claim input tax credit for GST paid on inputs & services.
-Ex: Exports of goods & services to foreign countries are considered zero-rated supplies under GST.

Non-GST supplies:
-GST Applicability: Non-GST supplies are exempt from GST since they fall outside purview of GST entirely. These supplies do not need imposition or collection of GST, thus no input tax credit is available.
Ex- Non- GST supplies include petroleum products (which are subject to separate state taxes), alcohol for human consumption, & some designated commodities such as stamps & cash.
In essence, main distinctions between these groups are tax rate & capacity to claim input tax credit.

Exempt supplies are not subject to GST, & no ITC may be claimed.
-Nil-rated supplies are taxed at 0% GST & are eligible for ITC.
-Zero-rated supplies are exports that are taxed at 0% GST rate with ITC claimable.
-Non-GST supplies are completely exempt from GST, with no GST imposed or collected, & no ITC may be claimed.
 

Reasons for Exemption under GST

Certain items, services, & transactions in India are exempt from GST, which implies they are not taxed. There are several reasons for providing GST exemptions, including policy aims, socioeconomic concerns, & administrative convenience. Here are some of typical grounds for granting exclusions from GST:

-Social Welfare & Public Interest. Certain essential items & services that are deemed necessary for wellbeing of society may be excluded from GST. This comprises essential food products (such as rice, wheat, & milk), as well as healthcare & education services.

-Small enterprises: To decrease compliance burden on small enterprises & enhance ease of doing business, firms with lesser turnover may be eligible for exemptions or concessional rates. Composition Scheme, for example, offers lower GST rates to small enterprises with turnover constraints.

-Export of Goods & Services: Exports are normally zero-rated under GST, which means they are taxed at zero percent. This guarantees that exports stay competitive in foreign markets while avoiding expense of GST.

-Interstate Supplies: Certain defined products & services supplied between states (interstate supplies) may be excluded or taxed at reduced rate in order to encourage free movement of commodities & services across state boundaries.

-Agriculture: Many agricultural goods & services are free from GST. This is done to help agriculture industry, which contributes significantly to India's economy.

-Government Services: Certain services provided by government or local governments may be excluded from GST in order to minimize double taxes & simplify accounting.

-Financial Services: Some financial services, such as banking, loan interest, & insurance, may be excluded or subject to specific conditions for determining GST obligation.

-Cultural & Religious Significance: Goods & services used for cultural, religious, or philanthropic reasons may be exempt in order to uphold society's cultural & social values.

-Administrative Simplicity: Exempting specific items or services can help to simplify tax system, lower compliance costs, & make it easier for companies & taxpayers to comprehend & comply with GST laws.

-Transitional Provisions: During GST transition, some exemptions or concessional rates may be offered to help firms migrate & mitigate effects of new tax regime.
 

Conclusion

GST exemptions are certain items or services that are excluded from GST. In other words, GST Act does not apply to some products & services. These exemptions change from time to time & vary by nation. government can issue exemptions for variety of reasons, such as lowering tax burden on vital products & services or assisting certain industries. 

Many essential items like fresh fruits, vegetables, & milk are categorized as GST exemption goods, making them more affordable for consumers. Businesses supplying GST exemption goods generally don't charge GST on their sales, but also cannot claim input tax credit (ITC) on purchases related to those goods. Staying updated on list of GST exemption goods is crucial for businesses to ensure they comply with GST regulations & avoid any potential tax issues. Healthcare & educational services are prime examples of GST exemption services, making them accessible to wider population. Businesses providing GST exemption services don't charge GST, but also cannot claim input tax credit (ITC) on purchases related to those services. When registering for GST, it's important to determine if your services fall under GST exemption services to ensure accurate tax filing & compliance.