The government has identified a number of items and services as GST-exempt. Unlike zero-rated goods and services, business owners cannot claim ITC for the sale of exempt goods and services.
In this article, we have compiled the exemption list for services under the GST.
Let’s have a look at the exemption list.
What services are GST exempt?
Similar to some items, specific services are also excluded from GST.
Agricultural Exemption Services
This contains all agricultural-related services, except horseback riding. Exempt services include those carried out by an Agricultural Produce Marketing Committee or Board or by an agent for the sale or purchase of agricultural produce, including planting, harvesting, providing farm labor, fumigating, packaging, renting or leasing agricultural machinery, and warehouse activities.
Transportation Exemption Services
- Upon payment of a toll, transportation services by road or bridge are provided, as well as products being transported by road (except when carried out by a transportation agency or courier agency).
- Inland waterway transportation of goods.
- Airline passenger transportation (in the states of Manipur, Meghalaya, Assam, Arunachal Pradesh, Nagaland, Sikkim, Tripura, and Bagdogra).
- Transporting goods such as agricultural products, milk, salt, newspapers, or wood grains; or transporting people using non-AC horses or hired carriages.
- Transporting products for which the total fee is less than Rs. 1500.
- Hiring services are offered to any state-run transportation company, including those for goods transport organizations and vehicles capable of carrying more than 12 people.
Services of the government and diplomatic missionaries
- Services provided by any overseas embassy with a presence in India.
- The Reserve Bank of India’s services.
- Services provided by the government or any local authority aside from those listed below:
- Services offered to anyone other than the government by the Department of Posts through express parcel post, life insurance, and agency services.
- Services for a ship or aircraft inside or outside the limits of a port or airport.
- Either the movement of goods or people.
- Services offered to diplomats, such as those from the United Nations.
- The Army, Navy, and Air Force Groups offer life insurance services as part of the National Pension System.
Judicial services
- Services rendered by an arbitral tribunal (i.e., services rendered by a court or a judge) to any person who is not a business entity or to a business entity with a prior fiscal year’s revenue of up to Rs. 20 lakhs (Rs. 10 lakhs for special category states) in total.
- Services rendered by a partnership firm of advocates to an advocate or partnership firm of advocates, any individual who is not a business entity, or a business entity with a revenue of up to Rs. 20 lakhs (Rs. 10 lakhs for special category states) in the previous fiscal year.
- Legal services are supplied by a senior advocate to anyone who is not a business entity or to a business entity with a prior fiscal year revenue of up to Rs. 20 lakhs (Rs. 10 lakhs for special category states) or more.
Educational Exempted Services
- Transportation for instructors and students, catering for the midday meal, admission, test services, security, and housekeeping.
- Indian Institutes of Management’s services (except the Executive Development Program).
- Under the cover of the central sector scheme “Scholarships for students with Disabilities,” organizations and NGOs offer coaching services.
Medical Exempted Services
- Veterinary clinic services; clinic or paramedic-provided healthcare services.
- Ambulance services, charitable organizations, and companies that organize religious pilgrimages.
Services by organizers
- Organizational services for commercial exhibits hosted outside of India.
- Services offered to foreign tourists by tour operators (this includes tours that are conducted completely outside India).
Other Services
- Organizational services for business exhibits hosted outside of India.
- Services offered to foreign tourists by tour operators (this includes tours that are conducted completely outside India).
- The authorized transmission or distribution of electricity.
- Services offered by reputable sporting organizations.
- Providing services is Press Trust of India, United News of India, or journalists. This includes gathering and disseminating news.
- Services that libraries offer.
- Services are offered for facilities used by the public, such as restrooms, lavatories, urinals, and toilets.
- Renting out automobiles to local governments and state-run transportation companies.
- Charges for overloading at a toll plaza.
- Rental of any religious facility is one of the services offered for holding religious rituals.
Which items are exempt from tax?
Here is a list of some of the items that are exempt from the GST.
| Types of goods | Examples |
| Live animals | Asses, cows, sheep, goat, poultry, etc. |
| Meat | Fresh and frozen meat of sheep, cows, goats, pigs, horses, etc. |
| Fish | Fresh or frozen fish |
| Natural products | Honey, fresh and pasteurized milk, cheese, eggs, etc. |
| Live trees and plants | Bulbs, roots, flowers, foliage, etc. |
| Vegetables | Tomatoes, potatoes, onions, etc. |
| Fruits | Bananas, grapes, apples, etc. |
| Dry fruits | Cashew nuts, walnuts, etc. |
| Tea, coffee and spices | Coffee beans, tea leaves, turmeric, ginger, etc. |
| Grains | Wheat, rice, oats, barley, etc. |
| Products of the milling industry | Flours of different types |
| Seeds | Flower seeds, oil seeds, cereal husks, etc. |
| Sugar | Sugar, jaggery, etc. |
| Water | Mineral water, tender coconut water, etc. |
| Baked goods | Bread, pizza base, puffed rice, etc. |
| Fossil fuels | Electrical energy |
| Drugs and pharmaceuticals | Human blood, contraceptives, etc. |
| Fertilizers | Goods and organic manure |
| Beauty products | Bindi, kajal, kumkum, etc. |
| Waste | Sewage sludge, municipal waste, etc. |
| Ornaments | Plastic and glass bangles, etc. |
| Newsprint | Judicial stamp paper, envelopes, rupee notes, etc. |
| Printed items | Printed books, newspapers, maps, etc. |
| Fabrics | Raw silk, silkworm cocoon, khadi, etc. |
| Hand tools | Spade, hammer, etc. |
| Pottery | Earthen pots, clay lamps, etc. |
Is GST No required for small businesses?
Yes, as required by the GST Act, all small enterprises register for GST.
Who doesn’t need GST registration?
- Agriculturists
- Individuals Exceeding the Threshold limit
- Individuals making exempt or nil-rated deliveries of goods and services
- Individuals making supplies of goods and services that are neither taxable nor subject to the GST
- Activities that are neither the supply of goods nor the provision of services
- Individuals who only make supplies that are subject to reverse charge.
FAQs: GST exemption list for services
1. Is water zero-rated or exempt?
Water rates are zero-rated.
2. Is milk zero-rated or exempt?
Milk is classified as a zero-rated item.
3. How is GST calculated for services?
A simple example can help clarify how GST is calculated: If a good or service is sold for Rs. 2,000 and the applicable GST rate is 18%, the net price will be determined as Rs. 2,360 (Rs. 2,000 + (2,000 X (18/100)) = 2,000 + 360 = Rs. 2,360).
4. What is GST return for services?
Each GSTIN-registered taxpayer must submit a GST return in accordance with the Goods and Services Tax (GST) regulations.
Conclusion
We hope you have a clear idea of the GST exemption list for services. If you have any other queries, reach out to our expert team. Visit our website, InstaFiling, for further information on GST.
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