List of Goods & Services Exempted Under GST

The Goods and Services Tax (GST) is a unified tax regime that has streamlined India’s complex indirect tax structure. Among its key features is the provision for certain Goods and Services exempted under GST, designed to reduce the tax burden on essential items and promote equitable economic growth. While GST applies to most goods and services, certain essential items are exempt to reduce the tax burden on consumers and promote equitable economic growth. Understanding these exemptions is crucial for businesses and consumers alike.

What are GST Exemptions?

GST exemptions refer to goods and services that do not attract any GST. These exemptions are categorized into 3 types:

• Exempted Goods: Products essential for daily life or public welfare.
• Exempted Services: Services that are vital for societal or economic development.
• Zero-Rated Supplies: Primarily exports or supplies to Special Economic Zones (SEZs), which attract a 0% GST rate.

These exemptions aim to make essential goods and services affordable, stimulate specific sectors, and promote fair taxation.

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GST Free Goods: List of Exempted Goods

Here is a list of goods exempted under GST:

• Agricultural Products:
  • Fresh fruits and vegetables.
  • Food grains, including rice and wheat.
  • Unprocessed spices.
• Essential Commodities:
  • Salt.
  • Water (except packaged drinking water).
• Educational Materials:
  • Books (excluding e-books).
  • Slates, pencils, and chalks.
• Healthcare Essentials:
  • Blood and its derivatives.
  • Vaccines (in specific cases).

These GST-free goods ensure that basic necessities remain affordable for the masses.

GST Free Services: List of Exempted Services

Certain services are exempted to support critical sectors. Key examples include:

• Healthcare Services:
  • Services by hospitals and doctors.
  • Diagnostic and paramedical services.
• Educational Services:
  • Tuition fees for schools and colleges.
  • Vocational training programs.
• Public Utilities:
  • Non-AC public transport (e.g., buses, railways).
  • Water supply and sewage services.
• Charitable Services:
  • Services by NGOs and religious trusts.

These exemptions aim to support essential services and reduce the financial burden on the public.

FAQs on GST Exemptions

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 Threshold Limit for GST Registration

2. Are government services exempt from GST?

Yes, services related to sovereign functions like defense, law enforcement, and public administration are exempt from GST. For more idea, refer our blog on GST on Import and Export Duties in India

3. Is GST applicable on exports?

No, exports fall under zero-rated supplies, meaning they are taxed at 0%, and exporters can claim a refund for input taxes.

4. Are training programs for agriculture exempt?

Yes, agricultural training services provided by recognized agencies are GST-free.

5. Is public transport exempt from GST?

Yes, non-AC public transport services, including rail, metro, and buses, are GST-exempt to keep commuting affordable.

Zero-Rated Supplies and Special Cases

Zero-rated supplies such as exports and supplies to SEZs attract a 0% GST rate. Additionally, businesses with annual turnovers below the threshold limit (ranging from ₹20 lakh to ₹40 lakh) are exempt from GST registration and payment.

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Recent Updates on GST Exemptions: December 21, 2024

Staying informed about GST updates is essential. For instance, recent GST Council meetings have introduced adjustments to the exemption list. Key updates include:

Rejection of GST inclusion for aviation fuel .

Introduction of new categories under exemptions for healthcare products. For a detailed breakdown of these changes, refer to India’s Tax Panel Updates.

Impact of GST Exemptions on Businesses

Understanding GST exemptions is vital for businesses. These exemptions:

• Reduce Costs: Lower operational costs for businesses dealing in exempt goods and services.
• Affect ITC Claims: Input Tax Credit (ITC) is not available for exempt supplies.
• Promote Sectors: Healthcare, education, and agriculture benefit significantly from GST exemptions.

Conclusion

GST exemptions aim to make essential goods and services accessible, benefiting various sectors such as agriculture, healthcare, and education. By understanding these exemptions, businesses and consumers can navigate the GST framework more effectively, ensuring compliance and taking full advantage of the relief provided.

Related topics:-
Understanding the Types of Services Under the GST Regime in India
Impact of GST Regulations on Supply Chain and Logistics in India