List of Goods & Services Exempted Under GST

GST
26 Jun 2024
goods-services-exempted-under-gst

The Goods and Services Tax (GST) in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. While GST aims to bring about uniformity in the tax structure and remove the cascading effect of taxes, certain goods and services are exempted from GST to provide relief to specific sectors and ensure affordability for the common man. Here’s a detailed list and explanation of the major goods and services that are exempted under GST.

Goods exempted from GST

1. Agricultural Products

  • Fresh Fruits and Vegetables: Fresh fruits and vegetables are exempt from GST to ensure affordability.
  • Unprocessed Cereals and Pulses: These basic food items are kept out of the GST purview to prevent any price rise.
  • Raw Meat, Fish, Eggs, and Milk: Essential protein sources like fresh meat, fish, eggs, and milk are exempt to promote nutritional security.

2. Books and Educational Materials

  • Printed Books and Newspapers: To encourage literacy and education, printed books and newspapers are exempt from GST.
  • Educational Kits and Tools: Educational aids such as slates, blackboards, and chalk are also GST-free.

3. Healthcare and Pharmaceuticals

  • Human Blood and Blood Products: These critical healthcare supplies are exempt to ensure accessibility.
  • Contraceptives: Contraceptives are GST-free to promote family planning and public health.

4. Public Utilities

  • Water Supply: Water (other than aerated, mineral, or packed drinking water) is exempt from GST to ensure the availability of this basic necessity.
  • Electricity: Electricity is also outside the GST regime, keeping it affordable for consumers.

5. Goods for Daily Use

  • Handloom Products: Traditional handloom products, which support local artisans, are exempt.
  • Khadi Garments: Khadi garments and goods produced by village industries are also GST-free to support rural economies.

Services Exempted Under GST

1. Educational Services

  • School Education: Services provided by schools and colleges, including transportation of students and faculty, are exempt.
  • Vocational Training: Recognized vocational training courses are also GST-free.

2. Healthcare Services

  • Medical Services: Healthcare services provided by hospitals, clinics, and diagnostic centers are exempt.
  • Medical Consultation: Services provided by individual medical practitioners are also exempt.

3. Financial Services

  • Interest on Loans: Interest charged on loans and advances is exempt from GST to promote financial inclusion.
  • Sale of Securities: The sale and purchase of securities, including shares and debentures, are GST-free.

4. Public Transportation

  • Railway and Road Transport: Non-AC rail travel and transport of goods by road (except services of a goods transport agency) are exempt.
  • Public Transport: Public transportation services like local trains, buses, and metro are GST-free to keep commuting affordable.

5. Government Services

  • Governmental Functions: Services provided by the Central and State Governments and local authorities relating to sovereign functions are exempt.
  • Consular Services: Services provided by foreign diplomatic missions are also GST-free.

6. Charitable Activities

  • Charitable Trusts: Services provided by charitable trusts registered under Section 12AA of the Income Tax Act are exempt.
  • NGO Services: Non-profit organizations providing educational or healthcare services are also GST-free.

FAQ on Goods & Services Exempted Under GST

1. What is the GST exemption limit for small businesses?

Small businesses with an annual turnover of up to ₹40 lakh (₹20 lakh for special category states) are exempt from GST registration and payment. For more detail read our blog on Threshold Limit for GST Registration

2. Are services provided by the government exempt from GST?

Yes, services provided by the Central and State Governments and local authorities that relate to sovereign functions are exempt from GST.

3. Are religious services exempt from GST?

Yes, services provided by entities registered under Section 12AA of the Income Tax Act for the conduct of religious ceremonies and services by priests or monks are exempt from GST.

4. Is there any GST exemption for transportation of agricultural produce?

Yes, the transportation of agricultural produce from the farm to the market is exempt from GST.

5. Are training programs for agriculture exempt from GST?

Yes, services related to training programs for agricultural practices provided by an agricultural extension agency are exempt from GST.

6. What are zero-rated supplies under GST?

Zero-rated supplies refer to the export of goods or services, as well as supplies made to Special Economic Zones (SEZs) or SEZ developers. These supplies attract a GST rate of 0%, meaning that the suppliers can claim a refund for the input taxes paid during the production of these goods or services.

Conclusion

The exemption of certain goods and services from GST serves to make essential commodities and services more affordable and accessible, particularly for the lower-income sections of society. It also supports various sectors, including agriculture, education, and healthcare, by reducing the financial burden on these critical areas. Understanding goods & services exhumed in GST helps businesses and consumers alike to navigate the GST regime more effectively and take full advantage of the benefits provided.

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