GST Exemptions

Cheatsheet Content

1. Introduction to Exemptions Exempt Supply: Supply of goods/services that attracts nil rate of tax or is wholly exempt from tax, including non-taxable supply. ($2(47)$) Non-Taxable Supply: Supply not leviable to tax under CGST/IGST Act. ($2(78)$) Examples: Alcoholic liquor for human consumption, specified petroleum products (Petroleum Crude, High Speed Diesel, Motor spirit, Natural Gas, Aviation Turbine Fuel). Power to Grant Exemption: Government can exempt in public interest, on GST Council's recommendation. ($11$ CGST Act, $6$ IGST Act) Exemptions can be absolute (unconditional and mandatory) or conditional (optional). Can be by notification (general) or special order (exceptional cases). 2. Types of Exemptions Exemption to specified activities/transactions: Status of supplier/recipient immaterial. Example: Services by way of transfer of a going concern. Exemption to specified suppliers: Status of recipient immaterial. Example: Charitable activities by $12AA$/$12AB$ registered entities. Exemption to specified recipients: Status of supplier immaterial. Example: Services to CG/SG/UT under insurance schemes where total premium is paid by them. Exemption to specified suppliers AND specified recipients: Example: Services by Employees’ State Insurance Corporation to persons governed under ESI Act. 3. Goods Exempt from GST Many everyday items are exempt under $11(1)$ CGST Act / $6(1)$ IGST Act. Examples: Live fish, fresh milk, potatoes, grapes, Indian National Flag, plastic bangles, unbranded atta/maida/besan, unpacked food grains, eggs, curd, lassi, fresh vegetables. 4. Services Exempt from GST (Key Categories) 4.1 Charitable and Religious Activities Charitable Activities by $12AA$/$12AB$ Registered Entity: Public health (care/counseling for specific conditions/persons, public awareness). Advancement of religion, spirituality, or yoga. Advancement of educational programs/skill development for specific vulnerable groups (abandoned, orphans, homeless children, abused/traumatized persons, prisoners, persons over 65 in rural areas). Preservation of environment. Conduct of Religious Ceremony: Exempt (e.g., priest services). Renting of Religious Precincts: Exempt if owned/managed by specified trusts ($12AA$/$12AB$/$10(23C)(v)$ IT Act or $10(23BBA)$ IT Act). Exclusions (taxable): Rooms with charges $\geq \text{₹ }1,000$ per day. Premises/halls/open areas with charges $\geq \text{₹ }10,000$ per day. Shops/spaces for business/commerce with charges $\geq \text{₹ }10,000$ per month. "Precincts" includes immovable property within the complex's outer boundary walls or immediate vicinity/surrounding. Religious Pilgrimage facilitated by GoI: Services by specified organizations (e.g., Kumaon Mandal Vikas Nigam Ltd. for Kailash-Mansarovar, Haj Committee of India for Mecca) are exempt. Training/Coaching: Recreational activities relating to arts/culture, by an individual. Sports, by charitable entities registered under $12AA$/$12AB$ IT Act. 4.2 Agriculture Related Services Loading, Unloading, Packing, Storage, Warehousing: Rice. Minor forest produce. Cereals, pulses, fruits and vegetables. Agricultural produce (general). Cultivation & Rearing (excluding horses) for food, fibre, fuel, raw material: Agricultural operations (cultivation, harvesting, threshing, plant protection, testing). Supply of farm labour. Processes at farm not altering essential characteristics (tending, pruning, cleaning, bulk packaging for primary market). Renting/leasing of agro machinery or vacant land for agriculture. Agricultural extension services. Services by Agricultural Produce Marketing Committee (APMC) or commission agent for sale/purchase of agricultural produce. Job Work: Intermediate production process for cultivation of plants & rearing of animals (excluding horses) for food, fibre, fuel, raw material, or agricultural produce. Artificial Insemination: Of livestock (other than horses). Note: Milling of paddy into rice, processing that alters essential characteristics (e.g., potato chips, jaggery), or makes produce marketable for retail market (e.g., dehusked pulses) are generally taxable. 4.3 Educational Services "Educational Institution" Definition: Provides services by way of: Pre-school education & education up to higher secondary school or equivalent. Education as part of a curriculum for obtaining a qualification recognized by law. Education as part of an approved vocational education course. Services provided BY an Educational Institution: To its students, faculty, and staff. By way of conduct of entrance examination against entrance fee. Services provided TO an Educational Institution: Exemption scope depends on the type of educational institution. Service Type Pre-school to Higher Secondary Qualification Recognized by Law Approved Vocational Course Transportation of students, faculty, staff Exempt Taxable Taxable Catering (including mid-day meals) Exempt Taxable Taxable Security, cleaning, housekeeping Exempt Taxable Taxable Admission/examination related services Exempt Exempt Exempt Online educational journals/periodicals Taxable Exempt Taxable Other Key Points: Hostel accommodation by educational institutions is exempt if naturally bundled with education for qualifying institutions. IIMs: Long duration programs (1+ year) giving recognized degrees are exempt. Short duration/participation certificate programs are taxable. Central/State Educational Boards (e.g., NBE) are "educational institutions" for examination conduct. Affiliation services by universities to colleges are taxable. Affiliation services by Central/State Educational Boards to Government Schools are exempt. 4.4 Health Care Services Definition of Health Care Services: Diagnosis, treatment, or care for illness, injury, deformity, abnormality, or pregnancy in any recognized system of medicine in India. Includes patient transportation to/from clinical establishment. Excludes: Hair transplant, cosmetic/plastic surgery (unless reconstructive due to congenital defects, injury, trauma). Recognized systems: Allopathy, Yoga, Naturopathy, Ayurveda, Homeopathy, Siddha, Unani, etc. Exempt if provided by: Clinical establishment, authorized medical practitioner, or para-medics. Exclusions (taxable): Services by a clinical establishment providing room (other than ICU/CCU/ICCU/NICU) with charges exceeding $\text{₹ }5000$ per day to a person receiving health care services. Food supplied to patients (not admitted) or visitors. Non-healthcare services (e.g., renting shops, advertising) in clinical establishment premises. Included: Food supplied to in-patients as advised by doctor/nutritionist (part of composite healthcare supply). Services by senior doctors/consultants/technicians (whether employees or not) through hospitals. ART procedures (e.g., IVF) for infertility. Veterinary Clinics: Services for health care of animals/birds are exempt. 4.5 Services Provided by Government Governmental Authority: Set up by Act of Parliament/State Legislature or established by Government, with $\geq 90\%$ equity/control, to carry out functions of Municipality ($243W$) or Panchayat ($243G$). Government Entity: Authority/board/body (incl. society, trust, corp.) set up by Act of Parliament/State Legislature or established by Government, with $\geq 90\%$ equity/control, to carry out a function entrusted by CG/SG/UT/LA. General Exemption (Entry 6): Services by CG/SG/UT/LA are exempt, excluding : Services by Dept. of Posts and Ministry of Railways (Indian Railways). Services relating to aircraft/vessel inside/outside airport/port precincts. Transport of goods or passengers. Any service (other than 1-3) provided to business entities (unless their turnover is below registration threshold). Specific Exemptions: Services by Governmental Authority for Panchayat ($243G$) or Municipality ($243W$) functions. Specified postal services (post card, inland letter, book post, ordinary post Services to business entities with turnover up to registration exemption limit (not for specified services or renting immovable property). Services between CG/SG/UT/LA (not for specified services). Services where consideration $\leq \text{₹ }5,000$ (per FY for continuous supply) (not for specified services). Supply of service by Government Entity to CG/SG/UT/LA or specified person against grants. Old age homes run by CG/SG/$12AA$/$12AB$ registered entities (for residents $\geq 60$ years) for consideration $\leq \text{₹ }25,000$ per month per member (incl. boarding, lodging, maintenance). Ministry of Railways (Indian Railways) services to individuals: platform tickets, retiring/waiting rooms, cloak room, battery operated car services. Services by one zone/division of Indian Railways to another. CG/SG/UT guaranteeing loans for their undertakings/PSUs. Registration, testing, calibration, safety check, certification required by law. Issuance of passport, visa, driving license, birth/death certificate. Tolerating non-performance of contract (fines/liquidated damages) payable to CG/SG/UT/LA. Assignment of right to use natural resources to individual farmers for cultivation/rearing (excluding horses). Deputing officers for import/export cargo inspection (Merchant Overtime charges). SG assigning right to collect royalty to Excess Royalty Collection Contractor (ERCC) (subject to conditions). Rehabilitation professionals' services at recognized establishments. 4.6 Construction Services Pure Labour Contracts: Construction, erection, commissioning, etc., of a civil structure or original works for beneficiary-led individual house construction/enhancement under Housing for All (Urban) Mission or Pradhan Mantri Awas Yojana. Electricity Distribution Utilities: Construction, erection, commissioning, or installation of infrastructure for extending electricity distribution network up to farmer's tube well for agricultural use. Pure Labour Contracts: Construction, erection, commissioning, or installation of original works for a single residential unit (not part of a residential complex). "Original Works": All new constructions; additions/alterations to abandoned/damaged structures to make them workable; erection/commissioning/installation of plant/machinery/equipment/structures. "Single Residential Unit": Self-contained unit for residential purposes for one family. "Residential Complex": Comprising building(s) with more than one single residential unit. 4.7 Passenger Transportation Services By Air: Economy class, embarking/terminating in specified North-Eastern states (Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura) or Bagdogra (West Bengal). To CG, embarking/terminating at RCS (Regional Connectivity Scheme) airport, against viability gap funding (for 3 years from operations start). By Road: Non-air conditioned contract carriage (other than radio taxi), excluding tourism, conducted tour, charter, or hire. Stage carriage (other than air-conditioned). Metered cabs or auto rickshaws (including e-rickshaws). Note: Services supplied through an ECO for non-AC contract carriage (excluding tourism/charter/hire) or metered cabs/auto rickshaws are taxable (ECO pays tax). By Rail: Other than first class or air-conditioned coach. By Metro, Monorail, Tramway. By Inland Waterways. By Public Transport Vessel: Between places in India, not predominantly for tourism. 4.8 Goods Transportation Services By Road: Exempt, except services of Goods Transportation Agency (GTA) or courier agency. By Inland Waterways: Exempt. By Rail or Vessel: Exempt for specific goods: Relief materials (for disasters). Defence or military equipment. Newspaper/magazines (registered with Registrar of Newspapers). Agricultural produce. Milk, salt, food grain (incl. flours, pulses, rice). Organic manure. Goods Transport Agency (GTA) Services: "GTA" Definition: Any person providing road transport services who issues a "consignment note." "Consignment Note": Serially numbered document with consignor/consignee, vehicle reg. no., goods details, origin/destination, gross weight, GSTIN of person liable for tax. Exemptions for GTA: Transport of specific goods (same list as for rail/vessel). Services to an unregistered person (incl. unregistered casual taxable person), except to: Factory (Factories Act). Society (Societies Registration Act). Co-operative Society. Body Corporate. Partnership firm (incl. AOP). Registered casual taxable person. Services to CG/SG/UT Department/Establishment, local authority, or Governmental agencies registered only for TDS ($51$) and not for taxable supply. "In relation to" in GTA: Includes ancillary services like loading/unloading, packing, temporary warehousing if part of composite supply of transport. Courier Agency: Door-to-door transportation of time-sensitive documents/goods. 4.9 Banking and Financial Services Extending Deposits, Loans, Advances: Exempt if consideration is interest or discount ( excluding interest on credit card services). Service fees, documentation fees, processing fees, etc., are taxable. Penal interest on overdue loans (if charged by lender as interest) is exempt. If charged by seller for delayed payment, it's taxable as part of supply value. Inter se Sale/Purchase of Foreign Currency: Among banks, or authorized dealers of foreign exchange, or between banks and such dealers. Banking Company Services: To Basic Saving Bank Deposit (BSBD) account holders under Pradhan Mantri Jan Dhan Yojana (PMJDY). Acquiring Bank Services: For settlement of amount $\leq \text{₹ }2,000$ in single transaction via credit/debit/charge/other payment card. Intermediary of Financial Services in IFSC SEZ: To customer outside India for international financial services in non-INR currencies. 4.10 Life Insurance Business Services Annuity under National Pension System (NPS): Regulated by PFRDAI. Group Insurance Schemes of CG: Provided by Army, Naval, Air Force Group Insurance Funds to their members; Naval Group Insurance Fund to Coast Guard personnel; Central Armed Police Forces Group Insurance Funds to their members. Under Specific Schemes: Janashree Bima Yojana, Aam Aadmi Bima Yojana, Life micro-insurance product (max. cover $\text{₹ }2,00,000$), Varishtha Pension Bima Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Jan Dhan Yojana, Pradhan Mantri Vaya Vandan Yojana. 4.11 General Insurance Business Services Under Specific Schemes: Hut Insurance Scheme, Cattle Insurance (Swarnajaynti Gram Swarozgar Yojna), Scheme for Insurance of Tribals, Janata Personal Accident Policy & Gramin Accident Policy, Group Personal Accident Policy for Self-Employed Women, Agricultural Pumpset and Failed Well Insurance, premia on export credit insurance, Restructured Weather Based Crop Insurance Scheme (RWCIS), Jan Arogya Bima Policy, Pradhan Mantri Fasal Bima Yojana (PMFBY), Pilot Scheme on Seed Crop Insurance, Central Sector Scheme on Cattle Insurance, Universal Health Insurance Scheme, Rashtriya Swasthya Bima Yojana, Coconut Palm Insurance Scheme, Pradhan Mantri Suraksha Bima Yojna, Niramaya Health Insurance Scheme, Bangla Shasya Bima. Reinsurance: Of the above specified insurance schemes. ("Retrocession" included). Services to CG/SG/UT: Under any insurance scheme where total premium is paid by CG/SG/UT. 4.12 Services by Specified Bodies Employees’ State Insurance Corporation (ESIC) to persons under ESI Act, 1948. Employees Provident Fund Organisation (EPFO) to persons under EPF & Miscellaneous Provisions Act, 1952. Coal Mines Provident Fund Organisation (CMPFO) to persons under Coal Mines Provident Fund & Miscellaneous Provisions Act, 1948. National Pension System (NPS) Trust to its members (administrative fee). 4.13 Pension Schemes Collection of contribution under Atal Pension Yojana. Collection of contribution under any State Government pension scheme. 4.14 Business Facilitator/Correspondent Services by BF/BC to Banking Company: For accounts in its rural area branch. Services by Intermediary to BF/BC: For above services. Services by BF/BC to Insurance Company: In a rural area. Rural Area: Village area (land revenue records) excluding municipal/urban areas. Note: Banking company is liable for GST on total service charge to customer, even if collected via BF/BC. BF/BC services not falling under exemption are taxable (RCM applies for banking company/BC). 4.15 Leasing Services Upfront Amount (Premium, Salami, etc.): For long-term lease ($\geq 30$ years) of industrial plots or plots for infrastructure development for financial business, provided by State Government Industrial Development Corporations/Undertakings or entities with $\geq 20\%$ CG/SG/UT ownership. Exemption applies whether payable in instalments or not, if determined upfront. Location charges/Preferential Location Charges (PLC) paid upfront for long-term lease are also exempt. Conditions apply regarding use for industrial/financial activity, monitoring by SG, and joint/several liability for tax if conditions violated. 4.16 Legal Services "Legal Service": Advice, consultancy, assistance in law, incl. representational services before court/tribunal/authority. Exemptions: By Arbitral Tribunal: To any person other than business entity; or business entity with aggregate turnover up to registration exemption limit; or CG/SG/UT/LA/Governmental Authority/Government Entity. By Partnership Firm of Advocates or Individual Advocate (other than Senior Advocate): To an advocate/partnership firm of advocates; or any person other than business entity; or business entity with aggregate turnover up to registration exemption limit; or CG/SG/UT/LA/Governmental Authority/Government Entity. By Senior Advocate: To any person other than business entity; or business entity with aggregate turnover up to registration exemption limit; or CG/SG/UT/LA/Governmental Authority/Government Entity. Note: Legal services to business entities with turnover above the registration exemption limit are taxable (RCM applies). 4.17 Sponsorship of Sports Events Exempt if organized by: National sports federation (or affiliated federations), where participants represent district, state, zone, or country. Association of Indian Universities, Inter-University Sports Board, School Games Federation of India, All India Sports Council for the Deaf, Paralympic Committee of India, or Special Olympics Bharat. Central Civil Services Cultural and Sports Board. Indian Olympic Association (as part of national games). Under Panchayat Yuva Kreeda Aur Khel Abhiyaan Scheme. 4.18 Skill Development Services Services provided by: National Skill Development Corporation (NSDC), National Council for Vocational Education and Training (NCVET), Awarding Body recognized by NCVET, Assessment Agency recognized by NCVET, Training Body accredited with an Awarding Body recognized by NCVET. In relation to: National Skill Development Programme or other NSDC schemes. Vocational skill development course under National Skill Certification and Monetary Reward Scheme. NSQF-aligned qualification/skill approved by NCVET. Assessing Bodies: Empanelled by DGT (Ministry of Skill Development & Entrepreneurship) for assessments under Skill Development Initiative Scheme. Training Providers (PIAs): Under Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDUGKY) by Ministry of Rural Development, GoI, for skill/vocational training courses certified by NCVET. 4.19 Performance by an Artist Exempt: Services by an artist performing folk or classical art forms (music, dance, theatre) if consideration $\leq \text{₹ }1,50,000$. Taxable: If consideration $ > \text{₹ }1,50,000$, the entire amount is taxable. Services by an artist as a brand ambassador (regardless of consideration). Performances in other art forms (e.g., western music, modern theatre, film/TV actors). Still art forms (painting, sculpture). 4.20 Right to Admission to Various Events Exempt: Museum, national park, wildlife sanctuary, tiger reserve, zoo. Protected monument. Specific events/places if consideration $\leq \text{₹ }500$ per person: Circus, dance, theatrical performance (incl. drama/ballet). Award function, concert, pageant, musical performance, or any sporting event (other than a recognised sporting event). Recognised sporting event. Planetarium. "Recognised sporting event": Organized by recognized sports body where participants represent district/state/zone/country; or by specific national/inter-university bodies, etc. "Recognised sports body": Indian Olympic Association, Sports Authority of India, recognized national/international sports federations/organizations. 4.21 Services by Unincorporated Body / Non-Profit Entity To its own members by way of reimbursement/contribution: As a trade union. For providing any exempt activity. Up to $\text{₹ }7,500$ per month per member for sourcing goods/services from a third person for common use in a housing society/residential complex. If monthly contribution exceeds $\text{₹ }7,500$, the entire amount is taxable. Ceiling of $\text{₹ }7,500$ applies per residential apartment if one person owns multiple. RWA needs GST registration if aggregate turnover $ > \text{₹ }20$ lakh (or $\text{₹ }10$ lakh for specified states). To its own members against membership fee $\leq \text{₹ }1000$ per member per year: Engaged in welfare activities for industrial/agricultural labor or farmers. Promotion of trade, commerce, industry, agriculture, art, science, literature, culture, sports, education, social welfare, charitable activities, environment protection. 4.22 Other Exempt Services Transfer of a Going Concern: As a whole or independent part thereof. Renting of Residential Dwelling: For use as residence, except when rented to a registered person. Exemptions for Registered Persons: Proprietor renting in personal capacity for own residence (not for proprietorship concern). Taxable: Accommodation services for students/hostels/P.G. accommodations. RCM: For renting to a registered person (whether for commercial or residential use), tax is paid by registered person under RCM. Accommodation Services: Value of supply $\leq \text{₹ }20,000$ per person per month, for minimum continuous period of 90 days. Satellite Launch Services. Giving on Hire: Motor vehicle (carrying $ > 12$ passengers) to State Transport Undertaking (STU). Electrically Operated Vehicle (carrying $ > 12$ passengers) to a local authority. Means of transportation of goods to a Goods Transport Agency (GTA). Motor vehicle for transport of students, faculty, staff to a person providing such services to an educational institution (pre-school to higher secondary equivalent). Access to Road or Bridge: On payment of toll charges (incl. higher toll for overloaded vehicles or vehicles without Fastag). Transmission/Distribution of Electricity: By an electricity transmission/distribution utility. Taxable services by DISCOMS: Application fee for connection, rental charges for metering equipment, testing fees, labor charges for shifting, duplicate bill charges. Exempt (Entry 25A): Supply of services like metering equipment on rent, testing for meters/transformers/capacitors etc., releasing electricity connection, shifting of meters/service lines, issuing duplicate bills etc., which are incidental or ancillary to the supply of transmission and distribution of electricity provided by electricity transmission and distribution utilities to their consumers. Services by an Incubatee: Up to total turnover of $\text{₹ }50$ lakh in a FY, if turnover not exceeding $\text{₹ }50$ lakh in preceding FY and $\leq 3$ years elapsed from agreement date. Research & Development Services: Against grants, supplied by Government Entity; or research association/university/college/institution notified under $35(1)(ii)$ or $(iii)$ IT Act. Taxable Services by TBI/STEP: Recognized by NSTEDB or bio-incubators recognized by BIRAC. Collecting/Providing News: By independent journalist, Press Trust of India, or United News of India. Public Libraries: Lending books, publications, or knowledge-enhancing content. Organiser to Person for Business Exhibition: Held outside India . Pre-conditioning, Pre-cooling, Ripening, Waxing, Retail Packing, Labelling: Of fruits and vegetables (not altering essential characteristics). National Centre for Cold Chain Development: Cold chain knowledge dissemination. Foreign Diplomatic Mission: Located in India. Granting National Permit: To goods carriage for operation across India/contiguous States. Providing Information: Under RTI Act. Services to Recognised Sports Body (RSB): By an individual (player, referee, umpire, coach, team manager) for participation in RSB-organized sporting event. By another RSB. Public Conveniences: Bathroom, washroom, lavatories, urinal or toilets. +-------------------------------------------------------------------+ | EXEMPTION FLOWCHART | +-------------------------------------------------------------------+ | | | Supply of Goods/Services | | (Is it leviable to tax under CGST/IGST Act?) | | | | +-------------------+ | | | YES | | | +-------------------+ | | | | | v | | Is it an 'Exempt Supply' as defined in Sec 2(47)? | | (Attracts nil rate, wholly exempt, or non-taxable supply?) | | | | +-------------------+ | | | YES | | | +-------------------+ | | | | | v | | Is it 'wholly exempt' by notification/special order? | | | | +-------------------+ | | | YES | | | +-------------------+ | | | | | v | | Is it an 'absolute' (unconditional) exemption? | | | | +-------------------+ | | | YES | | | +-------------------+ | | | | | v | | Mandatory Exemption (Supplier CANNOT collect/pay tax) | | | | +-------------------+ | | | NO | | | +-------------------+ | | | | | v | | Is it a 'conditional' exemption? | | | | +-------------------+ | | | YES | | | +-------------------+ | | | | | v | | Optional Exemption (Supplier MAY choose to avail or not) | | | | +-------------------+ | | | NO | | | +-------------------+ | | | | | v | | Taxable Supply | +-------------------------------------------------------------------+