GST Exemptions (Grade A)

Summary:

GST exemptions apply to specific goods and services, making it essential to verify whether a product or service is exempt before imposing GST. Exemptions include activities in Schedule III, zero-rated supplies like exports and supplies to SEZ developers or units, and exemptions granted by the Central Government for a public interest, such as essential goods and services. Special GST exemptions may also be granted under exceptional circumstances. Other GST exemptions involve intra-state supplies received by registered persons from unregistered suppliers and services received from providers in non-taxable territories or SEZ developers/units.

Excerpt:

GST Exemptions

Exemptions from GST

• Supply of some type of goods and services are exempted from GST, therefore before imposing GST on any goods or services, it is a must to check if it is exempted from GST or not.
• Exemptions may fall into the following categories:
  • Activities included in Schedule III are not treated as supply services by employees to employers, services by courts or Tribunal, functions performed by elected representatives such as MLAs, MPs, funeral, burial crematorium services, sale of land and actionable claims excluding lottery, betting, and gambling, etc.
  • Zero-rated supplies:
    • Export of goods and services or both;
    • Supplies to SEZ developer or SEZ unit
      • It is important to note that a person making a zero-rated supply is eligible to take ITC or can claim a refund of tax subject to fulfillment of certain conditions.
  • Exemptions granted by Central Government under special power:
    • In the public interest Central govt can give general exemption through notification- either absolute or conditional; whole or part of the tax. Examples are jute, meat products, milk products, children’s books, and other items which come under necessities. Similar is the case with services.
    • In public interest special exemption through an order- circumstances of an exceptional nature.