GST Exemption List 2026: Exempted Goods and Services in India

TL;DR: The GST exemption list covers fresh fruits, vegetables, milk, food grains, books, healthcare, education, public transport, and agricultural products. Zero-rated supplies like exports differ from exempt supplies — input tax credit rules apply differently to each. This guide lists all exempted goods and services under GST and explains the business impact for Indian MSMEs and traders.

The GST exemption list in India covers essential goods such as fresh fruits, vegetables, unbranded food grains, milk, eggs, printed books, salt, human blood, and hearing aids — and services such as healthcare, school education, public transport, and charitable activities. These exemptions are notified by the government under the GST Act and updated periodically by the Central Board of Indirect Taxes and Customs (CBIC).

Goods and Services Tax (GST) is an indirect tax system introduced in India on 1 July 2017. It replaced VAT, service tax, central excise duty, entertainment tax, and octroi — creating a unified tax structure across the country. Under GST, most goods and services are taxed at different rates.

However, certain essential goods and services are kept exempt to support public welfare, reduce the burden on basic necessities, and keep critical services accessible. This guide covers the full list of exempted goods and services under GST, the difference between exempt and zero-rated supplies, and what these exemptions mean for businesses and MSMEs.

What are GST Exemptions?

GST exemptions refer to goods and services on which GST is not charged. When a supply is exempt from GST, the supplier does not collect tax from the buyer, and the transaction falls outside the GST liability chain. Exemptions are notified by the government under the CGST Act and IGST Act, and apply to goods and services that serve essential public, welfare, agricultural, or religious purposes.

GST exemptions fall into three categories:

1. Exempted Goods

These are goods on which GST is not applicable. Examples include fresh fruits, vegetables, unbranded food grains, fresh milk, curd, eggs, printed books, salt, human blood, contraceptives, and hearing aids.

2. Exempted Services

These are services that do not attract GST. Examples include certain healthcare services, education services, public welfare services, and some government services.

3. Zero-Rated Supplies

Zero-rated supplies are different from exempt supplies. Exports and supplies made to Special Economic Zones are generally treated as zero-rated supplies. GST is charged at 0%, and businesses may claim input tax credit as per GST rules.

Check the complete GST-exempted goods listed here: GST Free Products in India

GST Free Goods: List of Exempted Goods Under GST

Exempted goods under GST span eight categories. The tables below map each category to its exempt items for quick reference. All exemptions are notified under Schedule I of the CGST Act and subject to CBIC updates.

Category	Exempt Items
Live animals	Cattle, sheep, goats, poultry
Meat and seafood	Fresh meat, fish, crustaceans, molluscs
Fruits	Bananas, apples, mangoes, grapes, papayas
Vegetables	Potatoes, onions, tomatoes, garlic, carrots
Food grains	Wheat, rice, maize, barley, millet, jowar, bajra
Flour and pulses	Pulses, wheat flour, cereal flour, pulse flour
Other food items	Jaggery, puffed rice, flattened rice, pappad, bread

⚠ Note: Exemption applies to unbranded or loosely sold forms. Branded and packaged versions may attract GST at 5%. Confirm the HSN code before treating a branded food supply as exempt.

Category	Exempt Items
Milk	Fresh and pasteurised
Curd products	Curd, lassi, buttermilk
Eggs	Birds’ eggs (fresh)
Honey	Natural honey — without a registered brand name
Meat and fish	Fresh, unprocessed forms

Category	Exempt Items
Salt	All forms
Electrical energy	Excluded from GST framework
Firewood and fuel wood	Unprocessed forms
Bangles	Plastic and glass only
Earthen pots and clay lamps	Handmade traditional forms
Hearing aids	Devices and parts
Passenger baggage	Personal baggage of travellers
Human blood and contraceptives	All forms

Category	Exempt Items
Printed books	Including Braille books
Newspapers, journals, periodicals	All registered publications
Children’s drawing and colouring books	All formats
Maps, atlases, globes, charts	Educational use
Slates, chalk sticks, slate pencils	All forms

Category	Exempt Items
Prasadam	From temples, mosques, churches, gurudwaras, dargahs
Puja samagri	Rudraksha mala, kalava, diya wick, chandan tika, panchamrit
Indian National Flag	All forms

Category	Exempt Items
Human blood and blood components	All forms
Condoms and contraceptives	All forms
Hearing aids	Devices and accessories
Animal-feed-grade healthcare products	Certain products only — confirm HSN

Category	Exempt Items
Khadi yarn	Certified khadi only
Raw silk	Unprocessed forms
Jute fibres	Raw and processed fibres
Coconut coir fibre	Raw forms
Gandhi topi	Traditional headwear
Handloom weaving machinery	Specified machinery only
Handmade musical instruments	Traditional instruments

Category	Exempt Items
Hand tools	Spades, shovels, sickles, axes, pruning tools, hoes, rakes
Livestock feed	Poultry feed, cattle feed, shrimp and prawn feed
Roughage and supplements	Grass, hay, straw, wheat bran

These goods fall outside the GST framework and are taxed under separate central or state legislation.

Goods Excluded from GST Altogether	Tax Treatment
Alcohol for human consumption	Taxed under state excise law
Petrol and diesel	Taxed under state VAT and central excise
Petroleum crude	Outside GST — state levy applies
Natural gas	Outside GST framework
Aviation turbine fuel (ATF)	Outside GST framework
Electricity	Taxed under Electricity Act
Tobacco products	GST applies + additional cess

GST Free Services: List of Exempted Services

Exempted services under GST cover healthcare, education, public transport, government services, charitable activities, and certain religious functions. These exemptions are notified under the IGST Act and CGST Act, and detailed in CBIC’s services exemption notification.

Service	Notes
Hospital treatment services	By clinical establishments and nursing homes
Doctor and medical professional services	In clinical settings only
Paramedical services	Nursing, physiotherapy, and allied health
Ambulance services	All forms of patient transport
Diagnostic services	In eligible clinical cases

These exemptions help keep essential healthcare accessible — particularly relevant for MSMEs whose employees access treatment through employer-linked schemes.

Service	Notes
Pre-school education	By recognised institutions
School education	Up to higher secondary level
Curriculum-based higher education	Leading to a recognised qualification
Certain vocational education	As notified under GST law

Coaching institutes, commercial training centres, and skill-development programmes outside recognised curricula are generally not exempt and may attract GST. Businesses running internal training programmes should verify classification before treating such expenses as GST-free.

Service	Exemption Condition
Non-AC public transport	Specified routes and vehicle types
Railway passenger transport	Certain classes and categories
Water supply services	By government or local authorities only
Sanitation and sewage services	Public utility services only

The exact exemption depends on the service type, supplier category, and conditions under the relevant GST notification.

Service	Condition
Religious ceremonies	By registered religious institutions
Charitable welfare activities	By entities registered under Section 12AA
Renting of religious places	Subject to value limits under GST law
Community welfare services	By eligible organisations only

For a complete list of GST-free services, visit: GST-Free Services in India

Difference Between Exempt Supply and Zero-Rated Supply

Many people confuse exempt supply with zero-rated supply. Both are different under GST.

Basis	Exempt Supply	Zero-Rated Supply
GST Rate	No GST is charged	GST rate is 0%
Input Tax Credit	Generally not available	May be available
Common Examples	Fresh fruits, vegetables, healthcare services	Exports and SEZ supplies
Tax Treatment	Exempt under GST law	Taxable at zero rate

Impact of GST Exemptions on Businesses

For Indian MSMEs and traders, GST exemptions affect five areas: tax collection obligations, input tax credit eligibility, compliance classification requirements, pricing decisions, and working capital planning. Understanding these impacts is essential for accurate GST filing.

1. No GST Collection:
   Businesses supplying exempt goods or services do not collect GST from customers. This reduces the price burden on buyers of essential goods — but it also means the supplier cannot pass on the GST paid on inputs through the pricing chain.
   
2. Input Tax Credit Limitation:
   ITC is generally not available on inputs, input services, or capital goods used exclusively for making exempt supplies. If a business makes both taxable and exempt supplies, ITC must be apportioned under Rule 42 and Rule 43 of the CGST Rules. Incorrectly claiming full ITC on mixed-use inputs is a common compliance error that attracts GST demand and penalties.
   
3. Compliance and HSN Classification:
   Businesses must correctly classify goods and services using HSN codes. Misclassification — treating a taxable supply as exempt — is a compliance risk. CBIC periodically issues clarifications and circulars that update the exemption status of specific goods and services. Businesses should monitor CBIC notifications and GST Council decisions, particularly after Union Budgets, as exemption lists are revised through government notifications.
   
4. Pricing Impact:
   Exempt suppliers cannot recover input GST through ITC. This means the input tax cost is embedded in the product cost, which can make exempt-category businesses less price-competitive than businesses in taxable categories that can fully offset their input taxes. For MSMEs in exempt sectors — agricultural traders, healthcare suppliers, educational material manufacturers — this embedded input cost should be factored into pricing strategy.
   
5. Working Capital Consideration:
   Businesses dealing in zero-rated supplies — exports and SEZ supplies — can claim ITC refunds, which can significantly improve working capital. Exporters who correctly classify supplies as zero-rated and file refund claims under Rule 89 of the CGST Rules recover input taxes paid across the supply chain. For MSME exporters, timely refund claims are a meaningful cash flow lever. Oxyzo’s working capital finance products — including invoice discounting and purchase finance — can bridge the gap between input tax payment and ITC refund receipt.

Conclusion

GST exemptions cover a wide range of essential goods and services — from fresh food and agricultural products to healthcare, education, and public transport. For businesses, correctly identifying whether a supply is exempt, zero-rated, or taxable determines GST collection obligations, ITC eligibility, and compliance filing requirements.

Since exemptions change through government notifications, businesses should refer to current CBIC notifications and HSN classifications before treating any supply as GST-free. For MSMEs managing working capital across taxable and exempt supply chains, Oxyzo’s business finance products — including purchase finance, invoice discounting, and working capital loans — are designed to support cash flow planning at every stage of the procurement and sales cycle.

Frequently Asked Questions About GST Exemptions

Q1: What is the GST exemption list in India?
The GST exemption list in India covers essential goods such as fresh fruits, vegetables, food grains, milk, eggs, printed books, salt, hearing aids, human blood, and agricultural tools — and services such as healthcare, school education, public transport, and charitable activities. The full list is notified under Schedule I of the CGST Act and updated through CBIC notifications. Exempted goods and services attract no GST, and suppliers of exempt supplies cannot collect GST from buyers.

Q2: What is the difference between GST-exempt goods and zero-rated supplies?
GST-exempt goods attract no tax and suppliers generally cannot claim Input Tax Credit on inputs used for exempt supplies. Zero-rated supplies — exports and SEZ supplies — are charged at 0% GST, but suppliers may claim ITC on inputs used. The practical difference is that zero-rated suppliers can recover their input tax costs through ITC refunds; exempt suppliers cannot. This makes zero-rated classification more financially advantageous for businesses with significant input costs.

Q3: Are branded food products exempt from GST?
Not always. GST exemptions for food products generally apply to unbranded or loosely sold forms. Branded and packaged versions of items such as wheat flour, pulses, curd, and buttermilk may attract GST — typically at 5%. The exemption status depends on whether the product carries a registered brand name and the specific HSN classification. Businesses should verify the HSN code and applicable CBIC notification before treating a branded food supply as exempt.