EXEMPTIONS UNDER GST

EXEMPTIONS UNDER GST

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EXEMPTIONS UNDER GST

Exemption refers to the release or privileged freedom from some duty or tax. GST also provides exemptions to some parties regarding the registration. There are some people who are exempted from the GST Registration based on what is the nature of their supply.

The taxpayers who are exempted from GST Registration are:

  • Agriculturists.
  • Persons falling in Threshold Exemption Limit.
  • Persons making Nil-Rated/ Exempt supplies of goods and services.
  • Persons making Non-Taxable/ Non-GST supplies of goods and services.
  • Activities that are neither Supply of Goods nor Services.
  • Persons making only supplies covered under reverse charge.

The details of all the parties exempted are as follows:

AGRICULTURISTS

An agriculturist is a person who supplies the products out of his cultivation land. They will be given exemptions from GST Registration. Agro-inputs like fertilizers, seeds, irrigation (electricity is required), machinery and all other agricultural services are also exempted under GST regime.

PERSONS FALLING IN THRESHOLD EXEMPTIONS LIMIT

EXEMPTIONS UNDER GST

A business entity with an annual turnover less than Rs. 20 lakh is given exemptions from GST registration. But there are some special category states (Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand) where this threshold limit is Rs. 10 lakh. 

PERSONS MAKING NIL-RATED/ EXEMPT SUPPLIES

These are the persons who are engaged in the business of supplying common items which are in the exemptions list of GST. Some of them are mentioned below:

  • All unprocessed food like rice, wheat, bread, milk, vegetables, cereals, eggs, meat, fish, salt etc.  
  • Train travel by local and sleeper classes
  • Education 
  • Healthcare (but not medicines)
  • Hotels, lodges with room rent less than Rs 1,000
  • Kid’s colouring /drawing books
  • Bindis, sindoor, bangles, etc

PERSONS MAKING NON-TAXABLE/ NON-GST SUPPLIES

Such items do not come under the purview or scope of GST:

EXEMPTIONS UNDER GST

ACTIVITIES THAT ARE NEITHER SUPPLY OF GOODS NOR SERVICES

These include:

  1. Services by an employee.
  2. Services by any Court or Tribunal.
  3. Functions and duties of –
    • MPs, MLAs, Members of Panchayats, Municipalities and other local authorities;
    • Person holding any Constitutional Post; 
    • Person as a Chairperson or a Member or a Director in a body.
  4. Funeral Services.
  5. Sale of land and building.
  6. Actionable claims (other than lottery, betting, and gambling).

PERSONS MAKING ONLY SUPPLIES COVERED UNDER REVERSE CHARGE

The Central Government has on 19th June 2016 via Notification No. 5/2017 exempted such persons from obtaining registration who are only engaged in making supplies of taxable goods or services, the total tax on which is liable to be paid on reverse charge basis by the recipient of such goods or services. This notification shall come into force on 22nd June 2016.

QUESTION COVERED

Do you agree that exemptions are given to Goods and Services from GST under the Act? If yes, then state the area of exemption in brief.

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GST and its featuresHistory of GSTAdvantages of GSTDisadvantages of GST
Constitutional aspects of GSTLiability of tax payerObjectives of GSTIGST
CGSTGST CouncilUTGSTSGST
Levy and collection of GSTComposition LevyOnline GST RegistrationExemptions under GST
Reverse Charge in GSTTaxable supplyTime of supplyValue of supply
Place of supplyInter-state supplyIntra-state supplyComposite supply
Mixed supply Composite and mixed supplyOnline payment of GSTHow to Claim TCS in GST
How to claim TDS in GSTInput tax credit under GSTTax InvoiceDebit Note in GST
Credit Note in GSTRevised Invoice in GSTSupplementary InvoiceE-Way bill in GST
GST ReturnsGSTN (Goods and Service Tax Network)GST Suvidha ProviderGST Portal
EXEMPTIONS UNDER GST

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