List of Goods & Services Exempted Under GST

GST

26 Jun 2024

Not sure which loan to go for?

Unlock your loan potential with our expert guidance!

Discover Loan Options

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.

List of GST Exempted from GST

Here is a detailed list of the major goods and services that are exempt under GST, providing relief to various sectors and supporting affordability.

Exempted Goods under GST

1. Agricultural Products

Fresh Fruits and Vegetables: Fresh fruits and vegetables are exempt under 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 foster education and promote literacy, printed books and newspapers do not attract GST. This exemption makes educational materials more accessible to the masses.
Educational Kits and Tools: Essential learning tools like slates, blackboards, and chalk, which are crucial for primary education, are also GST-free, ensuring affordability in education.

3. Healthcare and Pharmaceuticals

Human Blood and Blood Products: These life-saving essentials are exempt from GST to keep healthcare costs low and accessible to all.
Contraceptives: Contraceptives are exempt, to promote public health and support family planning initiatives across the country.

4. Public Utilities

Water Supply: Water used for drinking (other than bottled or mineral water) is GST-free, helping to maintain the affordability of this vital resource.
Electricity: Electricity is also exempt, ensuring it remains affordable for households and businesses alike.

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, government services related to sovereign functions, such as law enforcement and public administration, are outside the GST framework.

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, transporting agricultural produce from farms to markets is not subject to GST, supporting farmers.

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.