GST Exemptions Under CGST & IGST Act – Complete Guide with Examples

Introduction to GST Exemption

The Goods and Services Tax (GST) is a destination-based indirect tax levied on the supply of goods and services in India. While GST aims to create a unified tax structure by taxing most supplies, the Government has deliberately kept certain goods and services outside the tax net by granting exemptions. These exemptions are provided to promote public welfare, support essential sectors, reduce the cost of basic services, and encourage social and economic development.

A GST exemption means that no GST is payable on a specified supply of goods or services, provided the conditions prescribed under the GST law are satisfied. Suppliers making exempt supplies are generally not required to collect GST from recipients on such transactions. However, they are also not entitled to claim Input Tax Credit (ITC) on inputs, input services, and capital goods used exclusively for making exempt supplies.

The power to grant GST exemptions is provided under Section 11 of the CGST Act, 2017, Section 6 of the IGST Act, 2017, and the corresponding provisions of the State GST Acts. Based on the recommendations of the GST Council, the Central and State Governments issue exemption notifications from time to time in the public interest.

GST exemptions cover a wide range of services that are considered socially important or essential to the public. These include charitable and religious activities, educational services, healthcare, agricultural operations, passenger transportation, government services, banking and insurance, residential accommodation, and several other notified services. Some exemptions are unconditional, while others are available only when specific conditions or monetary limits are fulfilled.

Understanding GST exemptions is essential for taxpayers, professionals, businesses, students, and tax practitioners because an incorrect classification of an exempt supply may result in wrongful tax collection, denial of Input Tax Credit, interest, penalties, and unnecessary litigation. Proper knowledge of exemption provisions helps businesses remain GST compliant while minimizing tax disputes.

In this chapter, we will discuss all major GST exemptions category-wise, explain the conditions applicable to each exemption, provide practical examples, highlight important exceptions, and simplify the provisions for easy understanding. This comprehensive guide is designed to help readers understand when GST is applicable, when a supply is exempt, and the compliance implications of exempt supplies under the GST law.

Meaning of Exempt Supply

An Exempt Supply refers to the supply of goods or services on which GST is not payable under the provisions of the GST law. Such supplies are specifically exempted by the Government through notifications or are subject to a Nil rate of tax. In addition, certain supplies that are non-taxable under the GST Act are also treated as exempt supplies for specific compliance purposes.

As per Section 2(47) of the Central Goods and Services Tax (CGST) Act, 2017:

"Exempt Supply" means the supply of any goods or services or both which attracts a Nil rate of tax or which may be wholly exempt from tax under Section 11 of the CGST Act or Section 6 of the IGST Act, and includes non-taxable supply.

Components of Exempt Supply

An exempt supply generally falls into the following categories:

1. Nil-Rated Supply

These are supplies that are taxable under GST but carry a 0% GST rate.

Example:
If a product is notified with a GST rate of 0%, the supplier does not charge GST on its sale.

2. Wholly Exempt Supply

These are supplies specifically exempted through notifications issued by the Central or State Government in the public interest.

Example:

Healthcare services provided by a clinical establishment.
Services provided by recognised charitable trusts for specified charitable activities.
Educational services provided by eligible educational institutions.

3. Non-Taxable Supply

These are supplies that are outside the scope of GST because they are not leviable to tax under the GST Act.

Example:
Alcoholic liquor for human consumption is outside the levy of GST and is therefore treated as a non-taxable supply.

Features of Exempt Supply

No GST is charged on the supply.
The supplier cannot collect GST from the recipient.
Input Tax Credit (ITC) is generally not available on inputs, input services, and capital goods used exclusively for making exempt supplies.
The value of exempt supplies is included while calculating Aggregate Turnover for GST registration and certain compliance requirements.
Businesses making both taxable and exempt supplies must reverse proportionate ITC in accordance with the GST Input Tax Credit provisions.

Practical Example

Example 1: Healthcare Service

A hospital provides treatment to a patient and charges ₹1,50,000.

Value of Service: ₹1,50,000
GST Rate: Exempt
GST Payable: Nil

The hospital will not collect GST from the patient. However, ITC on inputs and input services used exclusively for providing exempt healthcare services cannot generally be claimed.

Example 2: Educational Service

A recognised school collects an annual tuition fee of ₹60,000 from a student.

Tuition Fee: ₹60,000
GST Rate: Exempt
GST Charged: Nil

Since eligible educational services are exempt, no GST is payable on the tuition fee.

Why Exempt Supplies Are Important

GST exemptions are granted to reduce the tax burden on essential sectors and welfare activities. They help make basic services such as education, healthcare, agriculture, charitable activities, and certain government services more affordable for the public while supporting social and economic development. The exemption categories discussed in this chapter include these and many other notified services under GST.

Types of GST Exemptions

The GST law provides various types of exemptions to ensure that essential goods and services, public welfare activities, and specific sectors of the economy are not burdened with tax. These exemptions are granted under Section 11 of the CGST Act, 2017 and Section 6 of the IGST Act, 2017, through notifications issued by the Central and State Governments on the recommendations of the GST Council.

Understanding the different types of GST exemptions is important because each category has different legal implications and compliance requirements.

1. Absolute Exemption

An Absolute Exemption is an unconditional exemption granted by the Government. Once such an exemption is notified, it is mandatory for the supplier to avail the exemption. The supplier cannot choose to pay GST on the exempt supply.

Features

Mandatory in nature.
No option to pay GST voluntarily.
GST cannot be collected from the recipient.
Input Tax Credit (ITC) is generally not available for inputs and input services used exclusively for such exempt supplies.

Example:

Healthcare services provided by a clinical establishment are exempt from GST. A hospital providing eligible healthcare services cannot charge GST to its patients.

2. Conditional Exemption

A Conditional Exemption is available only if the supplier satisfies the conditions specified in the exemption notification. If any prescribed condition is not fulfilled, the exemption is denied and GST becomes payable.

Features

Available only on fulfillment of specified conditions.
Non-compliance with any condition makes the supply taxable.
Conditions may relate to the supplier, recipient, value of supply, purpose of supply, or documentation.

Example:

Renting of rooms by a recognised religious trust is exempt only up to the prescribed monetary limits:

Room rent up to ₹999 per day
Hall rent up to ₹9,999 per day
Shop rent up to ₹9,999 per month

If these limits are exceeded, the exemption may not be available.

3. General Exemption

General exemptions apply to a broad class of goods or services and are intended to benefit the public at large. These exemptions are applicable throughout India unless specifically restricted.

Examples

Some common examples include:

Charitable activities undertaken by recognised charitable trusts.
Eligible educational services provided by educational institutions.
Healthcare services.
Agricultural support services.
Passenger transportation through specified modes.
Various government and public welfare services.

4. Special Order Exemption

Under Section 11(2) of the CGST Act, 2017, the Government may grant exemption through a Special Order in exceptional circumstances.

This type of exemption is generally issued:

In the public interest.
Under exceptional situations.
Subject to specific conditions and restrictions.
For a particular class of persons, goods, or services.

Such exemptions are generally granted after considering special circumstances affecting trade, industry, or public welfare.

Comparison of Different Types of GST Exemptions

Particulars	Absolute Exemption	Conditional Exemption	General Exemption	Special Order Exemption
Mandatory	Yes	No, subject to conditions	Yes	As specified in the order
Conditions	No	Yes	May or may not apply	Specified in the order
Issued Through	Notification	Notification	Notification	Special Order
Applicability	Specified goods/services	Goods/services fulfilling prescribed conditions	Wide range of notified supplies	Specific persons or situations
Option to Pay GST	Not available	Depends on compliance with conditions	Not available where exemption applies	As specified

Practical Illustration

Suppose a recognised charitable trust provides:

Free medical treatment to economically weaker patients.
Yoga training for public welfare.
Environmental conservation activities.

These services qualify for GST exemption because they fall under the notified charitable activities prescribed under the GST exemption notifications. However, if the trust provides taxable commercial services outside the scope of the notification, GST may become applicable on those services.

Key Points

GST exemptions reduce the tax burden on essential and socially beneficial activities.
Exemptions may be absolute or conditional depending on the notification.
Conditional exemptions require strict compliance with prescribed conditions.
The Government may also grant exemptions through special orders in exceptional circumstances.
Taxpayers should carefully verify the relevant exemption notification before treating any supply as exempt to avoid disputes and ensure GST compliance.

Charitable & Religious Services Exempt from GST

The Government grants GST exemptions to certain charitable and religious services to encourage social welfare, promote education and healthcare, preserve cultural values, and support religious activities. These exemptions are available only when the services are provided by eligible entities and satisfy the conditions prescribed under the GST exemption notifications.

The major exemptions relating to charitable and religious services are discussed below.

1. Charitable Activities by a Recognised Charitable Trust

Services provided by a recognised charitable trust are exempt from GST when they relate to specified charitable activities.

Eligible Charitable Activities

(a) Public Health

Services relating to public health are exempt, including:

Care of terminally ill persons.
Care and counselling of HIV/AIDS patients.
Rehabilitation and counselling of persons addicted to drugs or alcohol.

Example

A registered charitable trust operates a rehabilitation centre for drug-addicted persons and provides counselling free of cost. The services provided by the trust are exempt from GST.

(b) Advancement of Religion, Spirituality and Yoga

Services provided for promoting:

Religion
Spiritual activities
Yoga

are exempt when supplied by a recognised charitable trust.

Example

A charitable trust conducts free yoga camps and spiritual awareness programmes for the general public. No GST is payable on such services.

(c) Educational Programmes and Skill Development

GST exemption is available for educational or skill development programmes conducted for:

Abandoned or orphaned children
Physically or mentally challenged persons
Prison inmates
Persons residing in rural areas who are above 65 years of age

Example

A charitable trust provides vocational training to senior citizens living in rural areas to improve their livelihood. Such training is exempt from GST.

(d) Preservation of Environment

Services relating to the preservation of the environment are also exempt.

These include activities relating to:

Forest conservation
Watershed development
Wildlife protection
Environmental awareness programmes

Example

A recognised charitable trust undertakes afforestation and wildlife conservation projects funded through donations. These activities are exempt from GST.

Summary of Charitable Activities

Charitable Activity	GST Status
Care of terminally ill persons	Exempt
HIV/AIDS care and counselling	Exempt
Drug and alcohol rehabilitation	Exempt
Religious and spiritual programmes	Exempt
Yoga programmes	Exempt
Educational and skill development programmes for specified persons	Exempt
Preservation of forests and wildlife	Exempt
Environmental protection activities	Exempt

The above charitable activities are exempt only when provided by a recognised charitable trust.

2. Renting of Religious Places

GST exemption is also available for renting of religious places managed by recognised religious or charitable trusts, subject to specified monetary limits.

The exemption applies where the charges do not exceed:

Type of Accommodation	Exemption Limit
Room Rent	₹999 per day
Hall or Community Hall	₹9,999 per day
Shop or Other Space	₹9,999 per month

If the charges exceed the prescribed limits, GST may become applicable as per the prevailing law.

Example

A temple trust rents a guest room for ₹800 per day to pilgrims.

Room Rent = ₹800
Exemption Limit = ₹999

Since the room rent is within the prescribed limit, GST is not payable.

Similarly, if a marriage hall owned by a recognised trust is rented for ₹9,500 per day, the renting service qualifies for exemption because it is within the specified threshold.

3. Conduct of Religious Ceremonies

Services provided by recognised religious trusts for conducting religious ceremonies are fully exempt from GST.

These may include:

Pooja
Havan
Yajna
Religious rituals
Temple ceremonies
Other customary religious functions

Example

A temple trust charges devotees for conducting a special religious ceremony (Pooja). The amount collected for conducting the ceremony is exempt from GST.

4. Religious Pilgrimages

Certain notified religious pilgrimages organised through specified authorities are exempt from GST.

The exemption includes services relating to:

Kailash Mansarovar Yatra, organised through Kumaon Mandal Vikas Nigam Limited
Haj Yatra, organised by the Haj Committee

Example

A pilgrim registers for the Haj Yatra through the Haj Committee. The services provided under the notified pilgrimage scheme are exempt from GST.

Practical Illustration

Case Study

A recognised charitable trust undertakes the following activities during a financial year:

Activity	GST Status
Free yoga classes	Exempt
Drug rehabilitation centre	Exempt
Wildlife conservation programme	Exempt
Renting temple room for ₹850 per day	Exempt
Renting community hall for ₹9,000 per day	Exempt
Conducting religious ceremonies	Exempt
Organising Haj pilgrimage through the Haj Committee	Exempt

Since all these services fall within the notified exemption categories and satisfy the prescribed conditions, GST is not payable.

Key Points

Charitable activities undertaken by recognised charitable trusts are exempt from GST.
Public health, religion, spirituality, yoga, education, skill development, and environmental protection are covered under the exemption.
Renting of religious premises is exempt only up to the prescribed monetary limits.
Services for conducting religious ceremonies are fully exempt.
Specified religious pilgrimages such as the Kailash Mansarovar Yatra and Haj Yatra are also exempt under GST.
Taxpayers should ensure that all prescribed conditions are fulfilled before claiming the exemption.

Educational Services Exempt from GST

Education plays a vital role in the social and economic development of a nation. To make education more accessible and affordable, the Government has exempted several educational services from GST. However, these exemptions are available only for specified services provided by eligible educational institutions or notified organizations.

Under the GST exemption notifications, educational services, certain support services, examination-related services, and skill development programmes are exempt, subject to prescribed conditions.

1. Services Provided by Educational Institutions

Services provided by an Educational Institution to its students, faculty, and staff are exempt from GST.

An educational institution generally includes:

Schools
Colleges
Universities
Institutions providing education recognised by Indian law leading to a recognised qualification

The exemption applies to services provided to:

Present students
Prospective (future) students
Former (ex) students
Faculty members
Staff members

Examples of Exempt Services

Tuition fees
Admission fees
Library facilities
Laboratory facilities
Internal examinations
Student identity cards
Academic certificates

Example

A CBSE-affiliated school collects:

Admission Fee – ₹10,000
Annual Tuition Fee – ₹70,000

Since the school is a recognised educational institution, these services are exempt from GST.

Important Note

The course offered must lead to a qualification recognised under Indian law. Coaching centres and training institutes offering non-recognised courses generally do not qualify for this exemption unless covered under another exemption.

2. Transportation, Catering, Security and Housekeeping Services (TCS Services)

Certain support services provided to schools and Anganwadi institutions are exempt from GST.

These include:

Transportation of students, faculty and staff
Catering services (including Mid-Day Meal Scheme)
Security services
Housekeeping services

These services are exempt when supplied by the Government or other eligible service providers to schools or Anganwadis as specified under the exemption notification.

Example

A catering company supplies meals under the Mid-Day Meal Scheme to a Government school.

GST is not applicable on such services.

3. Examination-Related Services

Services relating to the conduct of examinations are exempt from GST.

These include:

Conduct of entrance examinations
Conduct of final examinations
Evaluation of answer sheets
Examination management services

The exemption also covers services provided to educational institutions in connection with examinations.

Example

A university appoints an agency to conduct online entrance examinations for admissions.

The examination-related services are exempt from GST.

4. Online Educational Periodicals

Supply of online educational journals, research publications, and educational periodicals to eligible educational institutions is exempt from GST.

This exemption encourages research, academic learning, and digital education.

Example

A university subscribes to an online legal research journal for students and faculty.

The supply of the online educational periodical qualifies for GST exemption under the notified provisions.

5. Educational Boards Treated as Educational Institutions

For the limited purpose of conducting examinations, Central and State Educational Boards are treated as educational institutions.

Accordingly, services provided by these boards for:

Conducting board examinations
Entrance examinations
Evaluation and certification

are exempt from GST.

Example

Services provided by a State Education Board for conducting Class X and Class XII board examinations are exempt from GST.

6. Skill Development Programmes

To promote employment and vocational education, services provided under specified Government skill development initiatives are exempt from GST.

These include programmes conducted under:

National Skill Development Corporation (NSDC)
Sector Skill Councils (SSC)
Assessment Agencies (AA)
Approved Training Partners

Examples of approved training partners include organisations notified under the relevant schemes.

Example

An NSDC-approved training partner conducts a welding certification programme under a Government skill development initiative.

The training service is exempt from GST.

7. Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY)

Services provided under the Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) are also exempt.

The objective of this scheme is to provide skill training and employment opportunities to rural youth.

Example

A training institute approved under DDU-GKY provides hospitality training to unemployed rural youth.

The training services are exempt from GST.

Summary of Educational Exemptions

Service	GST Status
Services provided by recognised educational institutions to students, faculty and staff	Exempt
Transportation of students, faculty and staff	Exempt (subject to conditions)
Mid-Day Meal and eligible catering services	Exempt
Security and housekeeping services for schools/Anganwadis	Exempt
Examination-related services	Exempt
Online educational periodicals supplied to eligible institutions	Exempt
Services under NSDC skill development programmes	Exempt
Services under DDU-GKY	Exempt

Practical Illustration

A recognised college provides the following services during an academic year:

Service	GST Applicability
Tuition Fees	Exempt
Admission Fees	Exempt
Library Facilities	Exempt
Examination Fees	Exempt
Online Educational Journal Subscription	Exempt
Transportation Facility for Students	Exempt (where covered by the notification)

Since these services fall within the notified exemption categories and the institution satisfies the prescribed conditions, GST is not payable on these supplies.

Key Points

Services provided by recognised educational institutions to students, faculty and staff are exempt from GST.
Examination-related services and online educational periodicals supplied to eligible institutions also enjoy GST exemption.
Transportation, catering, security and housekeeping services for schools and Anganwadis are exempt subject to prescribed conditions.
Skill development programmes conducted under NSDC and DDU-GKY are exempt to encourage vocational education and employment.
Institutions must ensure that the course or qualification is recognised under Indian law wherever the exemption specifically requires such recognition.

Healthcare Services Exempt from GST

Healthcare is one of the most important sectors where the Government has provided extensive GST exemptions to ensure affordable medical treatment for the public. Most healthcare services provided by eligible medical establishments and authorised healthcare professionals are exempt from GST, subject to the prescribed conditions.

The objective of these exemptions is to reduce the cost of medical treatment and improve access to quality healthcare across the country. The GST exemption covers not only diagnosis and treatment but also several related healthcare services.

1. Veterinary Healthcare Services

Healthcare services provided for animals and birds are exempt from GST.

The exemption includes:

Diagnosis
Medical treatment
Surgery
Preventive healthcare
Animal care services

provided by a veterinary clinic or veterinary hospital.

Example

A veterinary hospital treats an injured pet dog and charges ₹5,000 for treatment.

Since the service is provided by a veterinary clinic for the healthcare of animals, GST is not applicable.

2. Healthcare Services for Human Beings

Healthcare services provided by eligible medical establishments are exempt from GST.

Healthcare services include:

Diagnosis of diseases
Medical treatment
Surgical treatment
Nursing care
Preventive healthcare
Food supplied to admitted patients
Ambulance services
Treatment of diseases, abnormalities, injuries, deformities and infertility
Hair transplant and cosmetic or plastic surgery undertaken for medical treatment or reconstruction

The exemption applies when services are provided by:

Hospitals
Nursing homes
Clinics
Sanatoriums
Pathology laboratories
Diagnostic centres
Authorised healthcare professionals such as physiotherapists and dietitians, where covered by the healthcare exemption.

Example

A patient undergoes appendix surgery in a hospital.

Particulars	Amount
Hospital Charges	₹1,80,000
GST	Nil

The hospital is not required to charge GST because eligible healthcare services are exempt.

Important Note

Cosmetic procedures performed solely for beautification or aesthetic purposes are generally taxable. However, cosmetic or plastic surgery undertaken for reconstructive or therapeutic treatment is covered under the healthcare exemption.

3. Treatment of Infertility (IVF)

Healthcare services relating to infertility treatment, including In Vitro Fertilisation (IVF), are covered under the healthcare exemption.

Example

A fertility clinic provides IVF treatment to a couple.

The medical treatment qualifies as healthcare service and is exempt from GST.

4. Ambulance Services

Services provided by way of transportation of patients in an ambulance are exempt from GST.

The exemption applies irrespective of whether the ambulance service is provided by:

Hospital
Government body
Private operator
Charitable organisation

Example

A private ambulance transports a patient from one hospital to another and charges ₹3,000.

No GST is payable on the ambulance charges.

5. ICU, CCU, ICCU and NICU Services

Charges for specialised critical care units are fully exempt.

These include:

Intensive Care Unit (ICU)
Coronary Care Unit (CCU)
Intensive Coronary Care Unit (ICCU)
Neonatal Intensive Care Unit (NICU)

The exemption applies without any monetary limit.

Example

A patient is admitted to the ICU for three days and is charged ₹45,000.

Since ICU services form part of exempt healthcare services, GST is not applicable.

6. Hospital Room Charges

Room charges in hospitals (other than ICU/CCU/ICCU/NICU) are exempt where the room rent does not exceed ₹5,000 per day, as specified in the uploaded material.

Example

Room Rent	GST Status
₹4,800 per day	Exempt
ICU Room	Exempt irrespective of value

Hospitals should verify the applicable provisions and notifications for room charges, as GST treatment may vary depending on subsequent amendments.

7. Rehabilitation Centres

Services provided by recognised rehabilitation professionals through:

Rehabilitation centres
Medical establishments
Educational institutions
Centres established by the Central Government, State Government, Union Territory or recognised trusts

are exempt from GST.

These services include:

Rehabilitation therapy
Counselling
Special education support
Recovery programmes

Example

A rehabilitation centre provides therapy to accident victims to help them regain mobility.

The rehabilitation services are exempt from GST.

8. Public Convenience Services

Services providing public convenience facilities are also exempt.

These include:

Public toilets
Washrooms
Bathrooms
Urinals
Similar sanitation facilities

Example

A municipal authority operates a public toilet and collects a nominal user charge.

The service is exempt from GST.

Summary of Healthcare Exemptions

Healthcare Service	GST Status
Veterinary healthcare	Exempt
Hospital treatment	Exempt
Diagnostic services	Exempt
Pathology laboratory services	Exempt
Physiotherapy and dietetic services (where covered)	Exempt
Ambulance services	Exempt
IVF treatment	Exempt
ICU/CCU/ICCU/NICU services	Exempt
Eligible hospital room charges	Exempt
Rehabilitation services	Exempt
Public convenience facilities	Exempt

Practical Illustration

A hospital provides the following services:

Service	GST Applicability
General surgery	Exempt
Diagnostic tests	Exempt
Ambulance facility	Exempt
ICU admission	Exempt
Food supplied to admitted patient	Exempt
IVF treatment	Exempt
Cosmetic surgery for accident reconstruction	Exempt

Since these services qualify as healthcare services under the GST exemption provisions, GST is not payable on these supplies.

Key Points

Most healthcare services provided by eligible medical establishments are exempt from GST.
Veterinary healthcare services are also exempt.
Ambulance services remain exempt irrespective of the service provider.
IVF treatment, diagnostic services, rehabilitation services, and critical care services are covered under the exemption.
Proper classification of healthcare services is essential to ensure correct GST compliance and avoid disputes.

Sports Services Exempt from GST

To promote sports and encourage participation in national and international sporting events, the Government has granted GST exemptions to specified sports-related services. These exemptions cover services provided by recognised sports bodies, individual sportspersons, sponsors, and services relating to major international sporting events.

The exemption aims to reduce the tax burden on sporting activities and support the development of sports in India.

1. Services Relating to FIFA Events

Services provided by or to FIFA (Fédération Internationale de Football Association) and its subsidiaries in relation to notified FIFA events are exempt from GST.

The exemption covers:

FIFA U-17 World Cup
FIFA U-17 Women's World Cup
Other notified FIFA events under the exemption notification

Example

A company provides event management services directly to FIFA for organising the FIFA U-17 Women's World Cup.

Such services are exempt from GST, provided they satisfy the conditions of the exemption notification.

2. Services Relating to the Asian Football Confederation (AFC)

Services provided by or to the Asian Football Confederation (AFC) and its subsidiaries in connection with the AFC Women's Asia Cup 2022 are exempt from GST.

The exemption applies to services directly or indirectly related to the organisation and conduct of the event.

Example

An event organiser provides logistics services to AFC during the AFC Women's Asia Cup.

The services qualify for GST exemption under the notified provisions.

3. Sponsorship of Sporting Events

Services provided by way of sponsorship of sporting events organised by a recognised sports body are exempt from GST.

A recognised sports body may include national or state-level sports federations recognised by the Government.

Example

A company sponsors a national badminton championship organised by a recognised sports federation.

The sponsorship service qualifies for GST exemption.

4. Services Provided by Individual Sportspersons

Services provided by individuals participating in sporting events organised by recognised sports bodies are exempt.

The exemption covers services rendered as:

Player
Athlete
Referee
Umpire
Coach
Team Manager

Example

A cricket umpire officiates in a tournament organised by a recognised sports association.

The remuneration received by the umpire is exempt from GST.

Similarly, coaching services provided by a coach appointed for a recognised sporting event are also exempt.

5. Services Between Recognised Sports Bodies

Services supplied by one recognised sports body to another recognised sports body are exempt from GST.

This facilitates cooperation between sports organisations for conducting tournaments, training camps, and sporting events.

Example

A State Cricket Association provides stadium facilities to another recognised cricket association for conducting a domestic tournament.

The service qualifies for GST exemption.

Summary of Sports Exemptions

Sports Service	GST Status
Services by or to FIFA for notified events	Exempt
Services by or to AFC for notified events	Exempt
Sponsorship of recognised sporting events	Exempt
Services by players	Exempt
Services by referees and umpires	Exempt
Services by coaches	Exempt
Services by team managers	Exempt
Services between recognised sports bodies	Exempt

Practical Illustration

A recognised sports federation organises a national football championship and receives the following services:

Service	GST Applicability
Sponsorship from a corporate entity	Exempt
Referee services	Exempt
Coaching services	Exempt
Team manager services	Exempt
Services received from another recognised sports federation	Exempt

Since these services are provided in connection with recognised sporting events and fulfil the prescribed conditions, they are exempt from GST.

Important Points

The exemption is available only where the sporting event is organised by a recognised sports body or is covered under the relevant GST exemption notification.
Services connected with specifically notified international events such as FIFA and the AFC Women's Asia Cup are exempt only for the notified period and subject to the applicable conditions.
Commercial services not covered by the exemption notification may remain taxable under GST.

Key Points

GST exemptions are available for specified sports-related services to encourage sporting activities and international events.
Services provided by or to FIFA and AFC in relation to notified events are exempt.
Sponsorship of recognised sporting events enjoys GST exemption.
Services provided by players, referees, umpires, coaches, and team managers participating in recognised sporting events are exempt.
Services supplied between recognised sports bodies are also exempt.
Taxpayers should verify that the sporting event and the service fall within the scope of the applicable GST exemption notification before claiming the exemption.

Government Services Exempt from GST

The Government performs numerous public welfare functions through the Central Government, State Governments, Union Territories, Local Authorities, and Governmental Authorities. To ensure that essential public services remain affordable and to avoid unnecessary tax burdens on welfare activities, several Government services are exempt from GST.

These exemptions apply to specified services provided by or to Government authorities, as well as services performed in connection with constitutional functions, public administration, infrastructure development, agriculture, and public safety. However, certain commercial services continue to remain taxable under GST.

1. Services Relating to Functions under Articles 243G and 243W

Services relating to functions entrusted to Panchayats (Article 243G) and Municipalities (Article 243W) of the Constitution are exempt from GST.

These functions include:

Urban planning
Rural development
Public health
Water supply
Sanitation
Land consolidation
Slum improvement
Solid waste management

The exemption also extends to:

Pure services
Composite supplies where the value of goods does not exceed 25% of the total value (i.e., service component is at least 75%).

Example

A contractor is engaged by a Municipal Corporation exclusively for city sanitation services.

Since the service relates to a function under Article 243W, the supply is exempt from GST.

Important Note

Sanitation or conservancy services supplied to departments that do not fall within the constitutional functions (for example, certain defence establishments) may not qualify for this exemption.

2. Specified Public Welfare Services

Services relating to the following public welfare activities supplied to a Governmental Authority are exempt:

Water supply
Public health
Sanitation
Conservancy
Solid waste management
Slum improvement
Urban development

Example

A company undertakes solid waste management for a Municipal Corporation.

The service qualifies for GST exemption, subject to the prescribed conditions.

3. Government Services to Non-Business Entities

Services provided by the Central Government, State Government, Union Territory, or Local Authority to a non-business entity are generally exempt from GST.

However, certain commercial services continue to remain taxable.

These include services provided by:

Department of Posts (except specified basic postal services)
Indian Railways
Services relating to aircraft or vessels
Transportation of goods or passengers

Example

A Government department issues a certificate to an individual for personal purposes.

The service is generally exempt from GST.

4. Government Services to Small Business Entities

Services supplied by the Government to a business entity are exempt where the recipient's aggregate turnover in the preceding financial year does not exceed the threshold limit for GST registration, subject to the conditions specified in the exemption notification.

Example

A small trader below the GST registration threshold obtains a licence from a Government department.

The licence service may qualify for GST exemption under the relevant notification.

5. Services Between Government Departments

Services provided by one Government department to another Government department are exempt, except for specified taxable services.

Example

A State Government department provides administrative support to another State Government department.

The service is exempt from GST.

6. Small Value Government Services

Government services having a value up to ₹5,000 are exempt from GST.

For continuous supply of services (where the service extends beyond three months with periodic payments), the ₹5,000 limit is considered on a financial year basis.

Example

A Government office issues a duplicate certificate and charges ₹2,000.

Since the value is within the prescribed limit, the service is exempt.

7. Government Grants

Services where consideration is received in the form of a Government grant are exempt.

Example

A Government entity receives grant funding for implementing a rural development programme.

The service covered by the notified exemption is not liable to GST.

8. Long-Term Lease of Industrial Plots

Granting a long-term lease (30 years or more) of industrial plots or plots for infrastructure development by:

State Government Industrial Development Corporations, or
Government-controlled entities (with 20% or more Government ownership),

is exempt from GST.

Example

A State Industrial Development Corporation grants a 99-year lease of an industrial plot to a manufacturing company.

The lease qualifies for GST exemption under the prescribed notification.

9. Spectrum Allotment

Services relating to the allotment of spectrum prior to 1 April 2016 are exempt from GST.

10. Registration, Testing and Certification Services

The following Government services are exempt:

Registration under any law
Testing
Calibration
Safety inspections
Certification relating to public safety, workers' safety or consumer protection
Fire licence-related services

Example

A factory obtains a statutory safety certification from a Government department.

The certification service is exempt from GST.

11. Cancellation of Government Contracts

Amounts recovered as liquidated damages or penalties for non-performance of Government contracts are exempt from GST in the situations specified in the exemption notification.

12. Agriculture-Related Rights Granted by Government

Assignment of the right to use natural resources for:

Cultivation of plants
Rearing of animals (other than horses)
Production of food, fibre or raw materials

is exempt from GST.

13. Merchant Overtime Fee (MOT)

Merchant Overtime Fee collected by Government departments for deploying officers after office hours or on holidays for customs-related inspections is exempt.

Example

Customs officers inspect export containers after office hours upon payment of Merchant Overtime Fee.

The fee collected is exempt from GST.

14. Right to Information (RTI)

Fees collected for providing information under the Right to Information Act are exempt from GST.

Example

An individual pays the prescribed RTI application fee to obtain information from a Government department.

The fee is not subject to GST.

15. Government Loan Guarantee

Services provided by the Central Government, State Government or Union Territory by way of guaranteeing loans to Government undertakings or Public Sector Undertakings (PSUs) are exempt from GST.

Summary of Government Service Exemptions

Government Service	GST Status
Functions under Articles 243G & 243W	Exempt
Water supply and sanitation services	Exempt
Public health and solid waste management	Exempt
Services to non-business entities	Exempt (subject to exceptions)
Services to eligible small business entities	Exempt
Inter-Government services	Exempt
Government services up to ₹5,000	Exempt
Government grants	Exempt
Long-term lease of industrial plots	Exempt
Registration, testing and certification	Exempt
RTI services	Exempt
Merchant Overtime Fee	Exempt
Government loan guarantee	Exempt

Practical Illustration

A Municipal Corporation enters into the following contracts:

Service	GST Applicability
City sanitation project	Exempt
Solid waste management	Exempt
Water supply project	Exempt
Public health programme	Exempt
Safety certification issued by Government	Exempt
RTI application fee	Exempt

All the above services qualify for exemption where the prescribed conditions under the GST exemption notifications are fulfilled.

Key Points

Many Government services are exempt from GST to promote public welfare and reduce the tax burden on essential civic functions.
Services relating to constitutional functions under Articles 243G and 243W enjoy significant GST exemptions.
Public health, sanitation, water supply, registration, testing, RTI services, and Government grants are among the major exempt categories.
Certain Government services, such as specified commercial services, remain taxable.
Taxpayers should always verify the applicable exemption notification and ensure that all prescribed conditions are satisfied before claiming a GST exemption.

Agriculture & Allied Services Exempt from GST

Agriculture is the backbone of the Indian economy, providing livelihood to millions of farmers. To reduce the financial burden on the agricultural sector and promote rural development, the Government has granted GST exemptions to various agriculture and allied services. These exemptions cover services directly connected with cultivation, animal husbandry, storage, warehousing, electricity distribution, job work, and other agricultural support activities.

The objective is to ensure that essential agricultural operations remain cost-effective and that farmers are not burdened with indirect taxes on critical services.

1. Infrastructure for Agricultural Electricity Distribution

Services relating to the construction, erection, commissioning, or installation of infrastructure for extending electricity distribution networks up to agricultural tube-wells are exempt from GST.

The exemption applies when such services are provided by an Electricity Distribution Utility for agricultural use.

Example

An electricity distribution company installs power lines and transformers to connect irrigation tube-wells in a village.

Since the infrastructure is meant for agricultural use, the service is exempt from GST.

2. Loading, Unloading, Packing and Warehousing of Rice

Services relating to:

Loading
Unloading
Packing
Storage
Warehousing

of rice are exempt from GST.

Example

A warehouse stores rice belonging to a food processing company and charges storage fees.

The warehousing charges are exempt from GST.

3. Warehousing of Minor Forest Produce

Storage and warehousing services relating to minor forest produce are exempt.

Minor forest produce generally includes naturally available forest products collected without cutting trees, such as:

Honey
Bamboo
Tendu leaves
Lac
Medicinal herbs

Example

A cooperative society stores tendu leaves collected by tribal farmers.

The warehousing service is exempt from GST.

4. Warehousing of Agricultural Produce

Services by way of storage or warehousing of agricultural produce are exempt.

This includes:

Cereals
Pulses
Fruits
Vegetables

Important Note

The uploaded document specifically states that storage or warehousing of cotton in ginned or baled form is taxable, as it does not qualify for this exemption.

Example

A warehouse stores wheat and pulses after harvest.

The warehousing charges are exempt from GST.

5. Transmission and Distribution of Electricity

Transmission and distribution of electricity by transmission utilities, such as electricity distribution companies and power transmission entities, are exempt from GST.

Example

A State Electricity Distribution Company supplies electricity to farmers for irrigation purposes.

The transmission and distribution service is exempt.

6. Services Relating to Cultivation of Plants and Rearing of Animals

A wide range of services directly connected with agriculture and animal husbandry are exempt.

These include:

(a) Agricultural Operations

Services directly related to the cultivation and production of agricultural produce.

Example

Land preparation, sowing, irrigation and harvesting assistance.

(b) Supply of Farm Labour

Providing agricultural labour for farming operations is exempt.

Example

A labour contractor supplies workers for harvesting paddy crops.

The service is exempt.

(c) Agricultural Processes

Processes carried out at the farm that do not change the essential characteristics of agricultural produce but merely make it marketable are exempt.

Examples include:

Cleaning
Drying
Sorting
Grading

(d) Renting or Leasing of Agricultural Machinery and Land

GST exemption applies to:

Renting of agricultural machinery
Leasing of agricultural equipment
Leasing of vacant agricultural land
Structures incidental to agricultural use

Example

A farmer hires a tractor for ploughing fields.

The hiring charges are exempt.

(e) Loading, Packing and Storage of Agricultural Produce

Services such as:

Loading
Unloading
Packing
Storage
Warehousing

of agricultural produce are exempt.

(f) Agricultural Extension Services

Training, advisory and technical guidance provided to farmers for improving agricultural productivity are exempt.

(g) Services by Agricultural Produce Marketing Committee (APMC)

Services provided by:

Agricultural Produce Marketing Committees (APMCs)
Agricultural Marketing Boards
Commission agents involved in the sale or purchase of agricultural produce

are exempt from GST.

7. Job Work in Agriculture

Intermediate production processes carried out as job work in relation to:

Cultivation of plants
Rearing of animals (other than horses)
Agricultural produce

are exempt.

Important Exception

The uploaded document specifically clarifies that:

Milling of paddy into rice on a job work basis is taxable, and GST is payable only on the processing charges (job work charges), not on the value of the rice.

Example

A farmer sends harvested paddy for cleaning and drying before sale.

Such intermediate processing qualifies for exemption.

8. Artificial Insemination of Livestock

Services relating to artificial insemination of livestock (other than horses) are exempt from GST.

Example

A veterinary technician performs artificial insemination on dairy cattle.

The service is exempt.

9. Processing of Fruits and Vegetables

The following services relating to fruits and vegetables are exempt, provided they do not alter their essential characteristics:

Pre-conditioning
Pre-cooling
Ripening
Waxing
Retail packing
Labelling

Example

A cold storage facility ripens mangoes before dispatch to retailers.

The service is exempt from GST.

10. Cold Chain Knowledge Distribution

Services provided by the National Centre for Cold Chain Development (NCCD) for the distribution of cold chain knowledge are exempt.

These services promote efficient storage and transportation of perishable agricultural produce.

Summary of Agriculture & Allied Service Exemptions

Agriculture Service	GST Status
Agricultural electricity infrastructure	Exempt
Loading, unloading and warehousing of rice	Exempt
Warehousing of minor forest produce	Exempt
Storage of cereals, pulses, fruits and vegetables	Exempt
Transmission and distribution of electricity	Exempt
Agricultural operations	Exempt
Supply of farm labour	Exempt
Agricultural processing without changing essential characteristics	Exempt
Leasing of agricultural machinery and land	Exempt
Agricultural extension services	Exempt
APMC services	Exempt
Agricultural job work	Exempt (subject to exceptions)
Artificial insemination of livestock	Exempt
Processing of fruits and vegetables	Exempt
Cold chain knowledge distribution	Exempt

Practical Illustration

A farmer engages different service providers during a crop season:

Service	GST Applicability
Tractor hired for ploughing	Exempt
Farm labour for harvesting	Exempt
Storage of wheat	Exempt
Cold storage of fruits	Exempt
Cleaning and grading of agricultural produce	Exempt
Artificial insemination of dairy cattle	Exempt
Paddy milling on job work basis	Taxable (GST applicable on processing charges only)

Key Points

Most services directly connected with agriculture are exempt from GST to support farmers and reduce cultivation costs.
Exemptions include agricultural operations, farm labour, warehousing, electricity distribution, leasing of agricultural machinery, APMC services, and agricultural extension services.
Processing activities that merely make agricultural produce marketable without changing its essential character are exempt.
Warehousing of cotton in ginned or baled form and job work involving the milling of paddy into rice are specifically excluded from the exemption and are taxable as provided in the uploaded document.
Taxpayers should carefully verify the applicable GST notification and fulfil the prescribed conditions before claiming any exemption.

Passenger Transportation Services Exempt from GST

The Government has exempted several passenger transportation services under GST to make public transport affordable and encourage the use of economical modes of travel. These exemptions mainly apply to transportation by water, road, rail, and air, subject to specific conditions prescribed under the GST exemption notifications.

However, not every passenger transport service is exempt. Luxury, tourist, air-conditioned, and certain commercial transport services continue to attract GST.

The important exemptions relating to passenger transportation are discussed below.

1. Transportation by Water

Passenger transportation through specified water transport services is exempt from GST.

The exemption covers:

Inland waterways
Public transport through other waterways

However, transportation provided primarily for tourism does not qualify for the exemption and is taxable.

Example

Passengers travelling by a public ferry across a river pay ferry charges.

The transportation service is exempt from GST.

Important Note

Cruise services and tourism-oriented water transport are generally taxable because they are not considered public transportation.

2. Transportation by Road

Several passenger transport services by road are exempt.

(a) Non-AC Contract Carriage (Public Transport)

Transportation of passengers by non-air-conditioned contract carriage used for public transport is exempt.

However, the exemption does not apply to:

Air-conditioned buses
Tourist buses
Special contract vehicles

Example

A non-AC public bus carries passengers between two cities.

GST is not applicable.

(b) Stage Carriage (Non-AC)

Transportation by non-air-conditioned stage carriage is exempt.

A stage carriage refers to a public bus operating on fixed routes and carrying passengers for separate fares.

Example

A State Transport bus operating on a scheduled route is exempt from GST.

(c) School Bus Services

Transportation of students through school buses is exempt.

Example

A school provides transportation facilities for students through its own buses.

The transportation charges are exempt from GST.

(d) Metered Cabs Operated by the State Government

Passenger transportation through metered cabs operated by the State Government is exempt.

Example

A passenger hires a Government-operated metered taxi.

GST is not applicable.

(e) Rickshaws

Transportation by:

Cycle rickshaw
Auto rickshaw

is exempt.

However, app-based radio taxis and similar notified services do not qualify for this exemption where GST is applicable under the law.

Example

A passenger hires an auto-rickshaw for local travel.

The fare is exempt from GST.

3. Transportation by Rail

Passenger transportation by Indian Railways is exempt when travelling in:

Second Class
Sleeper Class
Other non-AC classes

However, travel in:

First Class
Air-Conditioned Classes

is generally taxable.

The exemption also extends to passenger transport through:

Metro Rail
Mono Rail
Tramways

Example

A passenger purchases a sleeper-class railway ticket.

No GST is payable on the ticket fare.

4. Transportation by Air

Certain air travel services are exempt from GST.

These include:

(a) Economy Class Travel in the North Eastern Region (NER)

Economy-class air travel connected with the North Eastern Region enjoys GST exemption.

(b) Regional Connectivity Scheme (RCS)

Flights operated under the Government's Regional Connectivity Scheme (UDAN) supported through viability gap funding are exempt.

Example

A passenger travels on a Government-supported regional flight under the UDAN scheme.

The air travel service qualifies for GST exemption.

5. Embassy Services

Services provided by foreign diplomatic missions, such as:

Visa processing
Consular services

are exempt from GST.

Example

An individual pays visa fees to a foreign embassy in India.

The service is exempt.

6. Passport, Driving Licence and Birth/Death Certificates

Services provided by the Central Government, State Government, Union Territory or Local Authority by way of issuing:

Passport
Visa on Arrival
Driving Licence
Birth Certificate
Death Certificate

are exempt from GST.

Example

A citizen applies for a driving licence at the Regional Transport Office (RTO).

The service is exempt from GST.

7. Tour Operator Services for Foreign Tourists

Where a tour operator provides services partly in India and partly outside India to a foreign tourist, the portion of the service performed outside India is exempt.

The exemption is restricted to the lower of:

The proportionate value of services performed outside India, or
50% of the total consideration charged for the entire tour.

Example

A tour package covers Nepal and India for a foreign tourist.

The eligible portion of the services performed outside India qualifies for GST exemption, subject to the prescribed limits.

Summary of Passenger Transportation Exemptions

Passenger Transportation Service	GST Status
Inland waterway transport	Exempt
Public ferry services	Exempt
Non-AC contract carriage (public transport)	Exempt
Non-AC stage carriage	Exempt
School bus transportation	Exempt
Government-operated metered cabs	Exempt
Cycle rickshaw and auto-rickshaw	Exempt
Non-AC railway travel	Exempt
Metro, Mono Rail and Tram	Exempt
Economy class flights in NER	Exempt
Regional Connectivity Scheme (UDAN) flights	Exempt
Embassy visa services	Exempt
Passport and driving licence services	Exempt
Eligible tour operator services for foreign tourists	Partially Exempt

Practical Illustration

A passenger uses the following transport services during a month:

Service	GST Applicability
Public ferry across a river	Exempt
Non-AC State Transport Bus	Exempt
Auto-rickshaw ride	Exempt
Sleeper class railway ticket	Exempt
Metro Rail travel	Exempt
Government-supported regional flight (UDAN)	Exempt
Chartered AC bus hired by a company for employees	Taxable

Key Points

GST exemptions are available for many public passenger transportation services by water, road, rail, and air.
Non-AC public transport, school buses, auto-rickshaws, metro rail, and specified regional air services are among the major exempt categories.
Tourist transport, air-conditioned contract carriage services, chartered employee transportation, and certain services supplied through notified e-commerce operators remain taxable.
Passport, driving licence, visa-related Government services, and specified tour operator services for foreign tourists also enjoy GST exemptions under prescribed conditions.
Taxpayers should carefully verify the applicable exemption notification before claiming any exemption.

Goods Transportation Services Exempt from GST

Transportation of goods is an essential part of trade and commerce. To reduce logistics costs for essential commodities, agriculture, exports, and Government-related activities, the GST law grants exemptions to several goods transportation services. These exemptions apply to transportation by road, inland waterways, and specified services provided by Goods Transport Agencies (GTAs), subject to prescribed conditions.

However, not all transportation services are exempt. Certain services, such as transportation by rail, export cargo by aircraft or vessel, and taxable GTA services, continue to attract GST.

The major GST exemptions relating to transportation of goods are discussed below.

1. Transportation of Goods by Water

Transportation of goods through inland waterways is exempt from GST.

This exemption encourages the use of inland water transport as a cost-effective and environmentally friendly mode of transportation.

Example

A company transports food grains through inland waterways from one State to another.

The transportation service is exempt from GST.

2. Transportation of Goods by Road

Transportation of goods by road, where the service is not provided by a Goods Transport Agency (GTA) or a courier agency, is exempt from GST.

This means that transport by individual truck owners or transporters who do not issue a consignment note generally remains outside the GST net.

Example

A local truck owner transports furniture without issuing a consignment note.

The transportation charges are exempt from GST.

Important Note

Transportation by a Goods Transport Agency (GTA) is governed by separate GST provisions and is taxable unless specifically exempt.

3. Transportation of Import Cargo

The uploaded chapter specifies that transportation of import cargo by aircraft or vessel is exempt from GST.

However, it also clarifies an important exception:

Transportation of export cargo by aircraft or vessel is taxable under the GST provisions referred to in the uploaded material.

4. Transportation of Specified Goods

Transportation of certain essential goods by Rail, Vessel or GTA is exempt from GST.

The specified goods include:

Milk
Salt
Flour
Pulses
Rice
Agricultural Produce
Newspapers
Magazines
Relief Materials
Defence and Military Equipment

Example

A Goods Transport Agency transports rice from a warehouse to a Government distribution centre.

The transportation service is exempt because rice is one of the specified exempt goods.

5. GTA Services to Unregistered Persons

Transportation of goods by a Goods Transport Agency (GTA) to an unregistered person, including an unregistered casual taxable person dealing in handicrafts, is exempt from GST.

Example

A GTA transports household goods for an individual who is not registered under GST.

The transportation service qualifies for exemption.

6. GTA Services to Government

Transportation of goods by a Goods Transport Agency is exempt when provided to:

Central Government
State Government
Union Territory
Local Authority
Governmental Authority

subject to the prescribed conditions.

Example

A GTA transports office equipment for a State Government department.

The transportation service is exempt from GST.

7. Services Relating to Nepal and Bhutan Transit Cargo

Services associated with the movement of transit cargo to and from Nepal and Bhutan are exempt.

The exemption includes services such as:

Transportation
Insurance
Logistics support

Example

An Indian logistics company transports goods from Kolkata Port to Nepal.

The transportation and related transit services qualify for GST exemption.

8. Satellite Launch Services

Satellite launch services are exempt from GST under the notified exemption.

Example

An Indian organisation provides satellite launch services under the notified exemption.

The service is exempt from GST.

9. National Permit Services

Granting a National Permit to a goods carriage for operation throughout India or contiguous States is exempt.

Example

A transport operator obtains a National Permit for a heavy goods vehicle.

The permit fee is exempt from GST.

Summary of Goods Transportation Exemptions

Goods Transportation Service	GST Status
Transportation through inland waterways	Exempt
Road transport (other than GTA and courier)	Exempt
Transportation of import cargo by aircraft or vessel	Exempt
Transportation of specified goods by Rail, Vessel or GTA	Exempt
GTA services to unregistered persons	Exempt
GTA services to Government	Exempt
Nepal and Bhutan transit cargo services	Exempt
Satellite launch services	Exempt
National Permit for goods carriage	Exempt

Practical Illustration

A logistics company provides the following services:

Service	GST Applicability
Transport of wheat by truck (non-GTA)	Exempt
Transport of rice by GTA	Exempt
Transport of newspapers by Rail	Exempt
Transport of relief materials	Exempt
Transport of household goods for an unregistered individual through GTA	Exempt
Transit cargo service to Nepal	Exempt
National Permit issued for a goods vehicle	Exempt

Important Points

Transportation by road is exempt only when the service is not provided by a GTA or courier agency.
Transportation of specified essential goods enjoys exemption even when carried by Rail, Vessel, or GTA.
GTA services are exempt only in the cases specifically notified under the GST exemption provisions.
The uploaded chapter specifically notes that transportation of export cargo by aircraft or vessel is taxable, whereas transportation of import cargo by aircraft or vessel is exempt.

Key Points

Several goods transportation services are exempt from GST to reduce logistics costs and support agriculture, public welfare, and international trade.
Exemptions cover inland waterway transport, non-GTA road transport, transportation of specified goods, eligible GTA services, Nepal and Bhutan transit cargo, satellite launch services, and National Permit services.
Businesses should determine whether the transporter is a GTA and verify the nature of the goods being transported before claiming an exemption.
Compliance with the applicable GST notification is essential to ensure that the exemption is correctly availed and disputes are avoided.

Entertainment & Admission Fees Exempt from GST

The Government has granted GST exemptions to certain entertainment, cultural, educational, and sporting activities to encourage public participation in art, culture, heritage, and sports. These exemptions primarily apply to admission fees charged for specified events and places, as well as services provided by artists and institutions engaged in promoting cultural and recreational activities.

However, the exemptions are available only for the categories and monetary limits specified under the GST exemption notifications.

1. Admission to Museums, National Parks and Protected Monuments

GST is not applicable on admission fees charged for entry into certain Government-recognised places of historical, cultural, and environmental importance.

The exemption covers admission to:

Museums
National Parks
Wildlife Sanctuaries
Tiger Reserves
Zoos
Protected Monuments

Example

A family purchases tickets to visit a National Park.

The admission charges are exempt from GST.

Similarly, entry tickets to Government museums and protected monuments are also exempt.

2. Training or Coaching in Arts and Culture

Services by way of training or coaching in recreational activities relating to arts or culture are exempt from GST.

These activities include:

Music
Dance
Painting
Theatre
Classical arts
Traditional cultural activities

Example

A music academy provides classical vocal training to students.

The coaching service is exempt from GST.

3. Sports Coaching

Training or coaching in sports is also exempt from GST.

The objective is to promote sports education and encourage participation in various sporting disciplines.

Example

A recognised sports academy conducts coaching classes for young athletes.

The coaching fees are exempt from GST.

4. Admission to Entertainment Events

GST exemption is available where the admission fee does not exceed ₹500 per person for specified entertainment events.

The exemption applies to admission for:

Circus performances
Dance performances
Theatre and drama
Ballet performances
Award functions
Concerts
Musical performances
Pageants
Sporting events (other than recognised sporting events)
Recognised sporting events
Planetarium shows

Example

A cultural organisation conducts a classical dance performance and charges ₹300 per ticket.

Since the admission fee does not exceed ₹500 per person, the entry fee is exempt from GST.

Important Note

If the admission fee exceeds the prescribed limit or the event does not fall within the notified categories, GST may become applicable.

5. FIFA and AFC Event Admission

Admission fees for notified international football events are exempt from GST.

The exemption includes:

FIFA U-17 World Cup
FIFA U-17 Women's World Cup
AFC Women's Asia Cup 2022

Example

A spectator purchases a ticket for a notified FIFA tournament.

The admission fee qualifies for GST exemption under the applicable notification.

6. Folk and Classical Artists

Services provided by folk or classical artists in relation to:

Music
Dance
Theatre

are exempt where the consideration charged does not exceed ₹1,50,000 per performance.

Example

A classical vocalist performs at a cultural festival and receives ₹1,20,000 as professional fees.

The performance qualifies for GST exemption.

Important Exception

If the artist provides services as a brand ambassador, the exemption is not available and the service becomes taxable.

Summary of Entertainment & Admission Fee Exemptions

Entertainment Service	GST Status
Entry to museums	Exempt
Entry to national parks	Exempt
Entry to wildlife sanctuaries	Exempt
Entry to tiger reserves	Exempt
Entry to zoos	Exempt
Entry to protected monuments	Exempt
Coaching in arts and culture	Exempt
Sports coaching	Exempt
Admission to specified entertainment events (up to ₹500 per person)	Exempt
Admission to notified FIFA and AFC events	Exempt
Folk and classical performances (up to ₹1,50,000 per performance)	Exempt

Practical Illustration

A charitable cultural organisation conducts several programmes during a month:

Activity	GST Applicability
Entry to museum	Exempt
Classical music concert (₹450 ticket)	Exempt
Theatre performance (₹400 ticket)	Exempt
Sports coaching programme	Exempt
Folk dance performance (Artist Fee ₹1,25,000)	Exempt
Brand endorsement by the same artist	Taxable

Key Points

Entry to museums, national parks, wildlife sanctuaries, tiger reserves, zoos, and protected monuments is exempt from GST.
Coaching in arts, culture, and sports enjoys GST exemption.
Admission to specified entertainment events is exempt where the ticket price does not exceed ₹500 per person.
Admission to notified FIFA and AFC football events is exempt.
Services of folk and classical artists are exempt where the consideration does not exceed ₹1,50,000 per performance, but services provided as a brand ambassador remain taxable.
Taxpayers should verify the applicable notification, monetary limits, and conditions before claiming a GST exemption.

Renting & Residential Accommodation Exempt from GST

The GST law provides exemptions for certain services relating to residential accommodation and construction to promote affordable housing and reduce the tax burden on individuals. These exemptions mainly cover renting of residential dwellings for residential use, specified construction services under Government housing schemes, Transfer of Development Rights (TDR), Floor Space Index (FSI), and long-term lease of land for residential projects.

However, these exemptions are subject to prescribed conditions and may not apply in all cases. Taxpayers should carefully examine the nature of the transaction before claiming the exemption.

1. Pure Labour Contracts under Pradhan Mantri Awas Yojana (PMAY)

Services provided by way of pure labour contracts for construction, erection, installation, completion, repair, maintenance, renovation, or alteration of residential houses under the Housing for All (Urban) Mission or Pradhan Mantri Awas Yojana (PMAY) are exempt from GST.

Since only labour services are covered, the exemption does not extend to contracts involving the supply of construction materials.

Example

A contractor is engaged only for labour work in constructing houses under PMAY.

The labour charges are exempt from GST.

2. Pure Labour Contracts for a Single Residential Unit

GST exemption is available for pure labour contracts relating to the construction of a single residential unit.

The exemption covers:

Construction
Erection
Installation
Commissioning
Original works

for an individual residential house.

Important Note

The exemption does not apply to:

Multi-storey residential buildings
Apartment complexes
Multi-unit residential projects

Example

A homeowner hires a contractor only for labour services to construct an independent house.

The labour charges qualify for GST exemption.

3. Renting of Residential Dwelling

Renting of a residential property intended for use as a residence is exempt from GST in cases covered by the exemption notification.

The uploaded document specifically states that the exemption applies on a Business-to-Consumer (B2C) basis.

Important Clarification

Where:

The recipient is a registered person,
The recipient is the proprietor of a proprietorship concern,
The residential dwelling is rented in the proprietor's personal capacity, and
The property is used as the proprietor's own residence,

the transaction is treated as B2C, and the exemption continues to apply.

Example 1

Mr. A rents an apartment for his family's residence.

Since the property is used solely as a residence, the rent is exempt from GST.

Example 2

A registered sole proprietor rents a flat in his own name for personal residence.

Although he is registered under GST, the transaction is treated as B2C because the property is used for his own residential purpose. Therefore, the rent remains exempt.

4. Transfer of Development Rights (TDR) and Floor Space Index (FSI)

GST exemption is available for services by way of transfer of:

Transfer of Development Rights (TDR)
Floor Space Index (FSI)

for construction of residential apartments intended for sale, wholly or partly, subject to the conditions specified in the exemption notification.

The exemption generally applies where consideration is received before the issuance of the completion certificate or before the first occupation of the project, whichever is earlier.

Example

A landowner transfers development rights to a real estate developer for constructing residential apartments intended for sale.

The transfer qualifies for GST exemption subject to the prescribed conditions.

5. Long-Term Lease of Land for Residential Projects

Services by way of granting a long-term lease of land (30 years or more) for the construction of residential apartments intended for sale are exempt from GST.

The exemption covers consideration received in the form of:

Premium
Salami
Development charges
Upfront price
Any similar payment

subject to the conditions specified in the notification.

Example

A development authority grants a 99-year lease of land to a developer for constructing residential apartments.

The lease premium qualifies for GST exemption where the prescribed conditions are fulfilled.

Important Clarifications

The uploaded chapter also contains the following important clarifications:

Preferential Location Charges (PLC)

Location charges or Preferential Location Charges (PLC) paid upfront as part of a long-term lease form part of the upfront lease premium and are covered by the exemption, subject to the applicable conditions.

Sale of Land

The sale of land is covered under Schedule III of the CGST Act and is neither a supply of goods nor a supply of services. Therefore, GST is not applicable on the sale of land.

Sale of Developed Land

The sale of developed land (after levelling, drainage, or similar development activities) continues to be treated as the sale of land and remains outside the scope of GST.

Development Services

Any separate service provided for the development of land, such as site development or infrastructure work, is taxable under GST.

Summary of Renting & Residential Accommodation Exemptions

Service	GST Status
Pure labour contract under PMAY	Exempt
Pure labour contract for a single residential unit	Exempt
Renting of residential dwelling for residential use (subject to conditions)	Exempt
TDR for residential apartments	Exempt
FSI for residential apartments	Exempt
Long-term lease (30 years or more) for residential projects	Exempt
Sale of land	Not a supply under GST
Sale of developed land	Not a supply under GST
Development services relating to land	Taxable

Practical Illustration

A real estate developer undertakes the following transactions:

Transaction	GST Applicability
Labour-only contract for PMAY housing	Exempt
Labour-only contract for an independent residential house	Exempt
Residential apartment rented to an individual for personal residence	Exempt (subject to applicable conditions)
Transfer of Development Rights (TDR) for a residential project	Exempt
99-year lease of land for residential apartments	Exempt
Sale of vacant land	Outside GST (Schedule III)
Site development services	Taxable

Key Points

GST exemptions are available for specified labour contracts relating to affordable housing and single residential units.
Renting of a residential dwelling for use as a residence is exempt in cases covered by the exemption notification, including certain situations involving registered proprietors using the property for personal residence.
Transfer of Development Rights (TDR), Floor Space Index (FSI), and long-term leases for eligible residential projects are exempt subject to prescribed conditions.
The sale of land and developed land is outside the scope of GST under Schedule III, whereas separate land development services are taxable.
Taxpayers should always verify the latest GST notifications and satisfy all prescribed conditions before claiming an exemption.

Banking Services Exempt from GST

The banking and financial sector plays a crucial role in the economy by providing credit, deposit, payment, and financial inclusion services. While many banking services are taxable under GST, the Government has exempted certain services to encourage financial inclusion, facilitate banking operations, and reduce the cost of essential financial services.

The GST exemptions primarily cover interest-based transactions, specified foreign exchange transactions, financial inclusion schemes, and certain intermediary services provided in rural areas and International Financial Services Centres (IFSCs).

1. Interest on Loans, Advances and Deposits

One of the most significant exemptions under GST is interest income earned by banks and financial institutions.

GST is not applicable on:

Interest on loans
Interest on advances
Interest on deposits
Discounting charges on bills (interest component)

This exemption applies because interest is specifically excluded from the GST levy under the exemption notification.

Example

A bank grants a home loan of ₹50 lakh to a customer and charges ₹4,20,000 as annual interest.

Particulars	Amount
Loan Amount	₹50,00,000
Interest Charged	₹4,20,000
GST	Nil

The interest earned by the bank is exempt from GST.

Important Note

The uploaded document specifically clarifies that interest involved in credit card services is taxable and does not qualify for this exemption.

2. Foreign Exchange Transactions Between Banks

Commission earned on the sale or purchase of foreign currency between:

Banking companies, and
Authorised foreign exchange dealers

is exempt from GST.

Example

A commercial bank sells US Dollars to another authorised dealer as part of inter-bank foreign exchange transactions.

The commission earned on the transaction is exempt from GST.

3. Pradhan Mantri Jan Dhan Yojana (PMJDY)

Services provided under the Pradhan Mantri Jan Dhan Yojana (PMJDY) are exempt from GST.

The scheme promotes financial inclusion by providing access to basic banking facilities for all citizens.

Example

A bank opens a Basic Savings Bank Deposit Account (BSBDA) under PMJDY and provides banking facilities to the account holder.

The services covered under the scheme are exempt from GST.

4. Card Transaction Processing Charges

GST exemption is available for card transaction processing services where the transaction amount does not exceed ₹2,000.

The exemption applies to processing transactions through:

Credit Cards
Debit Cards
Other notified payment cards

Example

A customer purchases groceries worth ₹1,800 using a debit card.

The card processing service qualifies for GST exemption because the transaction amount is within the prescribed limit.

5. Banking Correspondent and Business Facilitator Services

To strengthen banking services in rural areas, the following services are exempt:

Services by Business Facilitators (BF)

Services provided by a Business Facilitator to a banking company in respect of accounts maintained in rural branches are exempt.

Services by Business Correspondents (BC)

Services provided by a Business Correspondent to a banking company in rural areas are also exempt.

Services by Intermediaries

Services provided by an intermediary (agent of a Business Facilitator or Business Correspondent) are exempt where they relate to the above exempt services.

Example

A Business Correspondent collects deposits and assists customers on behalf of a rural branch of a bank.

The services provided are exempt from GST.

6. Services to Insurance Companies in Rural Areas

Services provided by a Business Facilitator or Business Correspondent to an insurance company in a rural area are exempt from GST.

Example

A Business Correspondent assists a rural insurance company in collecting premium applications and servicing policyholders.

The services qualify for GST exemption.

7. IFSC Intermediary Services

Services provided by an intermediary of financial services located in a Multi Services Special Economic Zone (SEZ) having International Financial Services Centre (IFSC) status are exempt when:

The customer is located outside India, and
The financial services are provided in currencies other than Indian Rupees (INR).

Example

An IFSC-based financial intermediary facilitates an international investment transaction for an overseas client in US Dollars.

The intermediary service qualifies for GST exemption.

Summary of Banking Service Exemptions

Banking Service	GST Status
Interest on loans	Exempt
Interest on advances	Exempt
Interest on deposits	Exempt
Bill discounting (interest component)	Exempt
Inter-bank foreign exchange commission	Exempt
Services under PM Jan Dhan Yojana	Exempt
Card transaction processing (up to ₹2,000 transaction value)	Exempt
Business Facilitator services in rural areas	Exempt
Business Correspondent services in rural areas	Exempt
Intermediary services relating to BF/BC	Exempt
Rural insurance facilitation services	Exempt
IFSC intermediary financial services (subject to conditions)	Exempt

Practical Illustration

A bank provides the following services during a month:

Service	GST Applicability
Home loan interest	Exempt
Savings account interest	Exempt
Bill discounting (interest portion)	Exempt
PM Jan Dhan account services	Exempt
Debit card transaction processing of ₹1,500	Exempt
Business Correspondent services for a rural branch	Exempt
Credit card interest and related charges	Taxable

Key Points

Interest earned on loans, advances, deposits, and the interest component of bill discounting is exempt from GST.
Interest and charges related to credit card services are specifically excluded from this exemption and remain taxable.
Services under the Pradhan Mantri Jan Dhan Yojana (PMJDY) and eligible low-value card transaction processing services are exempt.
Business Facilitators, Business Correspondents, and specified intermediary services in rural areas enjoy GST exemption.
Certain financial intermediary services provided through an International Financial Services Centre (IFSC) to overseas customers are also exempt, subject to prescribed conditions.
Businesses should carefully verify the applicable exemption notification and satisfy all conditions before claiming a GST exemption.

Insurance Services Exempt from GST

The insurance sector provides financial security against various risks, including life, health, accidents, pensions, and property loss. While most insurance services are taxable under GST, the Government has exempted several insurance schemes introduced for social security, financial inclusion, and public welfare.

These exemptions primarily cover Government-sponsored insurance schemes, pension schemes, reinsurance of exempt insurance policies, and insurance services provided to economically weaker sections of society.

1. Annuity Services under the National Pension System (NPS)

Services provided by way of life insurance business through annuity plans under the National Pension System (NPS) are exempt from GST.

An annuity provides a regular stream of income to subscribers after retirement.

Example

A retired employee purchases an annuity plan under the National Pension System and receives a monthly pension.

The annuity service provided by the life insurance company is exempt from GST.

2. Group Insurance Schemes for Armed Forces

Life insurance services provided under Group Insurance Schemes for members of:

Indian Army
Indian Navy
Indian Air Force
Central Armed Police Forces (CAPFs)

are exempt from GST.

Example

A life insurance company provides group insurance coverage to members of the Indian Army.

The insurance service is exempt from GST.

3. Insurance Services by Government Bodies

Insurance and social security services provided through Government organisations are exempt.

The exemption covers services provided by:

Employees' State Insurance Corporation (ESIC)
Employees' Provident Fund Organisation (EPFO)
Coal Mines Provident Fund Organisation (CMPFO)
National Pension System (NPS)

Example

ESIC provides medical insurance benefits to eligible employees.

The services are exempt from GST.

4. General Insurance under Specified Government Schemes

General insurance services provided under notified Government welfare schemes are exempt.

Some of the schemes mentioned in the uploaded chapter include:

Hut Insurance Scheme
Jan Arogya Bima Policy
Pradhan Mantri Suraksha Bima Yojana (PMSBY)
Niramaya Health Insurance Scheme
Bangla Shasya Bima Yojana

These schemes primarily benefit economically weaker sections, farmers, and vulnerable communities.

Example

A farmer purchases crop insurance under the Bangla Shasya Bima Yojana.

The insurance service is exempt from GST.

5. Life Insurance under Specified Welfare Schemes

Life insurance services provided under specified social welfare schemes are exempt.

These include:

Jan Shree Bima Yojana
Aam Aadmi Bima Yojana
Life Micro Insurance Products (with maximum insurance cover up to ₹2,00,000)
Varishtha Pension Bima Yojana
Pradhan Mantri Jan Dhan Yojana
Pradhan Mantri Vaya Vandana Yojana

Example

A low-income individual purchases a Life Micro Insurance Policy with a sum assured of ₹2 lakh.

The life insurance service qualifies for GST exemption.

6. Insurance Premium Paid by Government

Insurance services are exempt where the entire insurance premium is paid by:

Central Government
State Government
Union Territory

Example

A State Government pays the full insurance premium for a health insurance scheme covering economically weaker families.

Since the premium is fully paid by the Government, the insurance service is exempt from GST.

7. Reinsurance Services

Services by way of reinsurance of insurance policies that are themselves exempt are also exempt from GST.

This includes reinsurance relating to:

Exempt General Insurance Schemes
Exempt Life Insurance Schemes
Insurance where the premium is fully paid by the Government

Example

An insurance company reinsures policies issued under the Pradhan Mantri Suraksha Bima Yojana.

The reinsurance service is exempt from GST.

8. Atal Pension Yojana (APY)

Services provided under the Atal Pension Yojana (APY) are exempt from GST.

The scheme provides guaranteed pension benefits to subscribers after retirement.

Example

A subscriber contributes regularly under the Atal Pension Yojana.

The pension-related services are exempt from GST.

9. State Pension Schemes

Services provided under State Government Pension Schemes are also exempt from GST.

Example

A State Government pension scheme provides retirement benefits to eligible citizens.

The services under the notified pension scheme are exempt from GST.

Summary of Insurance Service Exemptions

Insurance Service	GST Status
Annuity under National Pension System (NPS)	Exempt
Group Insurance for Armed Forces	Exempt
ESIC, EPFO, CMPFO and NPS services	Exempt
General insurance under notified Government schemes	Exempt
Life insurance under specified welfare schemes	Exempt
Insurance where premium is fully paid by Government	Exempt
Reinsurance of exempt insurance policies	Exempt
Atal Pension Yojana (APY)	Exempt
State Pension Schemes	Exempt

Practical Illustration

An insurance company provides the following services:

Service	GST Applicability
National Pension System annuity	Exempt
Army Group Insurance Scheme	Exempt
Pradhan Mantri Suraksha Bima Yojana	Exempt
Life Micro Insurance Policy (₹2 lakh cover)	Exempt
Health insurance fully funded by State Government	Exempt
Reinsurance of exempt Government insurance scheme	Exempt
Atal Pension Yojana services	Exempt

Key Points

Several Government-sponsored insurance and pension schemes are exempt from GST to promote financial security and social welfare.
Exemptions cover annuity services under the National Pension System, Group Insurance Schemes for Armed Forces, ESIC, EPFO, CMPFO, and notified welfare insurance schemes.
Insurance services where the entire premium is paid by the Government are also exempt.
Reinsurance of exempt insurance policies enjoys the same GST exemption.
Services provided under the Atal Pension Yojana and State Pension Schemes are exempt.
Taxpayers should verify the applicable notification and ensure that the insurance scheme falls within the notified exemption before claiming GST exemption.

Business-related Exemptions under GST

While GST is generally applicable to business and commercial transactions, the Government has granted exemptions for certain business-related services to promote entrepreneurship, encourage start-ups, reduce logistics costs, facilitate legal access, and support specific sectors of the economy.

These exemptions cover the transfer of a going concern, hiring of specified vehicles, toll charges, incubator services, legal services, and business exhibitions held outside India. Each exemption is subject to the conditions prescribed under the GST exemption notifications.

1. Transfer of a Going Concern

Services by way of the transfer of a going concern, either as a whole or as an independent part of a business, are exempt from GST.

A going concern means a business that is transferred as a running business with the intention of continuing its operations.

Example

ABC Manufacturing Ltd. transfers its entire textile division to another company along with employees, machinery, contracts, and business operations.

Since the business is transferred as a going concern, the transaction is exempt from GST.

2. Hiring of Motor Vehicles (Capacity of 13 or More Passengers)

Hiring of a motor vehicle designed to carry 13 or more passengers (including the driver) is exempt when provided to specified recipients.

The exemption applies to:

State Transport Undertakings
Local Authorities
Goods Transport Agencies (in specified cases)
Persons providing transportation services to students, faculty, and staff of educational institutions

Example

A transport company hires a 40-seater bus to a Government State Transport Undertaking.

The hiring service is exempt from GST.

3. Hiring of Electric Vehicles

Services by way of hiring electric vehicles (EVs) having a seating capacity of 13 or more passengers are also exempt when supplied to eligible recipients.

Example

A company leases an electric bus to a Municipal Transport Corporation for public transport.

The hiring charges are exempt from GST.

4. Hiring of Goods Transport Vehicles

Hiring of a goods transport vehicle to a Goods Transport Agency (GTA) is exempt from GST.

Example

A truck owner rents a goods vehicle to a GTA for transporting cargo.

The hiring service qualifies for GST exemption.

5. Hiring of Vehicles for Educational Institutions

Hiring of motor vehicles to a person providing transportation services to:

Students
Faculty
Staff

of a recognised educational institution is exempt.

Example

A bus operator supplies school buses to a contractor engaged in transporting students to a recognised school.

The hiring service is exempt from GST.

6. Toll Charges

Services by way of granting access to a road or bridge on payment of toll charges are exempt from GST.

The exemption covers:

National Highways
State Highways
Expressways
Toll bridges

Important Clarification

The uploaded chapter clarifies that:

Additional toll charges collected from vehicles not having FASTag
Additional fees charged for overloaded vehicles

are treated as part of the toll charges and are also exempt from GST.

Example

A truck pays ₹1,000 as toll charges on a National Highway.

No GST is payable on the toll charges.

7. Services Provided to Start-ups (Incubatee)

Services provided by an incubator to an eligible start-up (incubatee) are exempt from GST.

These services include:

Office space
Infrastructure
Capital support
Mentoring
Coaching
Networking
Business advisory services

Conditions

The exemption is available where:

The turnover of the start-up in the preceding financial year does not exceed ₹50 lakh.
The exemption is available for a period of up to three years, subject to the conditions specified in the notification.

Example

A recognised technology incubator provides office space and mentoring services to a newly incorporated software start-up.

The services qualify for GST exemption, provided the prescribed turnover and time-limit conditions are satisfied.

8. Services Provided by an Incubator

Services provided by a recognised incubator to eligible incubatees are exempt under the prescribed conditions.

Examples of incubators include:

Research and Development Centres
Technology Business Incubators
Innovation Centres recognised under Government programmes

Example

A university-based incubation centre provides mentoring and networking support to an eligible biotechnology start-up.

The service is exempt from GST.

9. Legal Services

Specified legal services provided by:

Individual Advocates
Partnership Firms of Advocates
Arbitral Tribunals

are exempt when provided to:

Non-business entities
Government Departments
Business entities whose aggregate turnover in the preceding financial year does not exceed the applicable GST registration threshold

Legal services include:

Legal advice
Consultancy
Representation before courts or tribunals
Drafting of legal documents

Important Clarification

The uploaded document specifically states that legal services provided by a Senior Advocate to another Senior Advocate, Junior Advocate, or a Firm of Advocates are taxable and do not qualify for this exemption.

Example

An advocate provides legal advice to an individual for a family property dispute.

Since the recipient is a non-business entity, the legal service is exempt from GST.

10. Business Exhibitions Held Outside India

Services provided by an organiser in respect of a business exhibition held outside India are exempt from GST.

Example

An Indian trade association organises an international footwear exhibition in Germany for Indian manufacturers.

The organising service relating to the exhibition held outside India is exempt from GST.

Summary of Business-related Exemptions

Business-related Service	GST Status
Transfer of a going concern	Exempt
Hiring of motor vehicles (13 or more passengers) to eligible recipients	Exempt
Hiring of electric vehicles (13 or more passengers)	Exempt
Hiring of goods transport vehicles to GTA	Exempt
Hiring of vehicles for transportation to educational institutions	Exempt
Toll charges	Exempt
Services by recognised incubators to eligible start-ups	Exempt (subject to conditions)
Eligible incubator services	Exempt
Legal services to specified recipients	Exempt
Business exhibitions held outside India	Exempt

Practical Illustration

A company undertakes the following transactions:

Transaction	GST Applicability
Sale of an entire running business division	Exempt
Hiring a 45-seater bus to a State Transport Undertaking	Exempt
Leasing a truck to a GTA	Exempt
Payment of National Highway toll charges	Exempt
Incubation services provided to an eligible technology start-up	Exempt
Legal advice provided by an advocate to an individual	Exempt
Organising a trade exhibition in Singapore	Exempt

Key Points

Transfer of a running business as a going concern is exempt from GST.
Hiring of specified passenger vehicles, electric buses, and goods transport vehicles is exempt in notified cases.
Toll charges collected for using roads and bridges are exempt, including additional charges for vehicles without FASTag or overloaded vehicles.
Eligible start-ups receiving services from recognised incubators enjoy GST exemption subject to turnover and time-limit conditions.
Legal services provided by advocates and arbitral tribunals to specified recipients are exempt, while certain services by senior advocates remain taxable.
Services relating to business exhibitions conducted outside India are also exempt under the GST law.
Businesses should ensure that all conditions prescribed under the relevant exemption notifications are fulfilled before claiming GST exemption.

Additional Exemptions under the IGST Act, 2017

Apart from the exemptions available under the Central Goods and Services Tax (CGST) Act, 2017, certain additional exemptions are provided under the Integrated Goods and Services Tax (IGST) Act, 2017 through Notification No. 9/2017 – Integrated Tax (Rate). These exemptions mainly relate to cross-border services, imports of services, tourism, and international business transactions.

The objective of these exemptions is to promote international trade, avoid double taxation, facilitate diplomatic and charitable activities, and encourage exports of services.

1. Import of Services by Specified Persons

Certain imported services are exempt from IGST when:

The supplier of service is located outside India, and
The recipient of service is located in India, and
The recipient belongs to a specified category notified under the exemption.

The exemption is available when services are imported by:

Central Government
State Government
Union Territory
Local Authority
Governmental Authority
Individuals using the service for personal (non-business) purposes
Recognised Charitable Trusts
Foreign Diplomatic Missions (Embassies) for official or personal use
United Nations and other International Organisations for official purposes
Special Economic Zone (SEZ) Developers and SEZ Units

Example

A recognised charitable trust in India receives free consultancy services from an organisation located outside India for its charitable projects.

The imported service qualifies for exemption from IGST, subject to the prescribed conditions.

2. Tour Operator Services Provided to Foreign Tourists

Services provided by an Indian tour operator to a foreign tourist are exempt where the entire tour is conducted outside India.

This exemption promotes inbound tourism businesses that organise international tours.

Example

An Indian travel company organises a tour covering France, Switzerland, and Italy for a foreign tourist.

Since the entire tour is conducted outside India, the service is exempt from IGST.

3. Services Between Branch Office and Head Office Located Outside India

Services supplied by:

An Indian Branch Office to its Head Office located outside India, or
An Indian Head Office to its Branch Office located outside India,

are exempt under the notified provisions.

This exemption helps avoid unnecessary taxation on specified intra-entity international transactions.

Example

An Indian branch office provides accounting support to its Head Office situated in Singapore.

The service qualifies for exemption under the IGST notification, subject to the prescribed conditions.

4. Intermediary Services Where Both Supplier and Recipient of Goods Are Outside India

Services provided by an Indian intermediary are exempt where:

The supplier of goods is located outside India, and
The recipient of goods is also located outside India.

Although the intermediary is located in India, the transaction qualifies for exemption under the notified provisions.

Example

An Indian commission agent facilitates the sale of machinery from a manufacturer in Germany to a buyer in the United States.

Since both the supplier and recipient of the goods are located outside India, the intermediary service qualifies for the exemption under the uploaded material.

Summary of Additional IGST Exemptions

Service	GST Status
Import of services by Government	Exempt
Import of services by recognised charitable trusts	Exempt
Import of services for personal use by individuals	Exempt
Import of services by Embassies	Exempt
Import of services by United Nations and International Organisations	Exempt
Import of services by SEZ Developers and SEZ Units	Exempt
Tour operator services conducted wholly outside India for foreign tourists	Exempt
Services between Branch Office and Head Office located outside India	Exempt
Intermediary services where both supplier and recipient of goods are outside India	Exempt

Practical Illustration

The following transactions are undertaken by different organisations:

Transaction	GST Applicability
Consultancy service imported by a recognised charitable trust	Exempt
Legal service imported by an individual for personal use	Exempt
Tour package organised entirely outside India for a foreign tourist	Exempt
Accounting support from an Indian branch office to its foreign Head Office	Exempt
Indian intermediary arranging export of goods between Germany and the USA	Exempt

Important Points

These exemptions are available under Notification No. 9/2017 – Integrated Tax (Rate) issued under the IGST Act.
The exemptions mainly apply to specified cross-border services and international transactions.
The eligibility for exemption depends on the location of the supplier, location of the recipient, nature of the service, and the status of the recipient.
Proper documentation should be maintained to substantiate the claim for exemption during GST audits or assessments.

Key Points

The IGST Act provides additional exemptions for specific international transactions to facilitate global trade and prevent double taxation.
Import of services by Government bodies, recognised charitable trusts, individuals for personal use, embassies, international organisations, and SEZ units is exempt in specified cases.
Tour operator services provided to foreign tourists for tours conducted wholly outside India are exempt.
Services between branch offices and head offices located outside India, as well as certain intermediary services involving overseas parties, also qualify for exemption under the prescribed conditions.
Taxpayers should carefully verify the applicable notification and satisfy all prescribed conditions before claiming any IGST exemption.

Summary Table of Important GST Exemptions

The following table provides a quick overview of the major GST exemptions discussed in this chapter.

Category	Major Exempt Services
Charitable & Religious Services	Charitable activities, public health services, yoga, religious ceremonies, renting of religious places (subject to limits), Kailash Mansarovar Yatra, Haj Yatra
Educational Services	Services by recognised educational institutions, transportation, catering, examination services, online educational periodicals, skill development programmes
Healthcare Services	Hospital treatment, diagnostic services, ambulance services, veterinary healthcare, rehabilitation services, IVF treatment, ICU services
Sports Services	Services by players, referees, coaches, sponsorship of recognised sporting events, FIFA and AFC events
Government Services	Public health, sanitation, water supply, Government grants, RTI services, registration, testing, certification, long-term lease of industrial plots
Agriculture & Allied Services	Farm labour, warehousing of agricultural produce, agricultural operations, electricity distribution, APMC services, agricultural extension services
Passenger Transportation	Inland waterways, non-AC public buses, school buses, auto-rickshaws, metro, non-AC rail travel, specified air services
Goods Transportation	Inland waterways, specified goods transported by Rail/Vessel/GTA, transportation by road (other than GTA), Nepal and Bhutan transit cargo
Entertainment & Admission Fees	Museums, National Parks, Wildlife Sanctuaries, coaching in arts and sports, admission to specified events, folk and classical performances
Renting & Residential Accommodation	Residential dwelling for residential use (subject to conditions), PMAY labour contracts, TDR, FSI, long-term lease of residential land
Banking Services	Interest on loans and deposits, PM Jan Dhan Yojana, rural banking correspondent services, specified IFSC services
Insurance Services	NPS annuity, ESIC, EPFO, Government insurance schemes, Atal Pension Yojana, reinsurance of exempt policies
Business-related Exemptions	Transfer of going concern, toll charges, legal services, incubator services, hiring of specified vehicles, exhibitions outside India
IGST Exemptions	Import of services by specified persons, services between branch and head office, foreign tour operator services, specified intermediary services

The exemptions mentioned above are subject to the conditions prescribed under the relevant GST notifications and amendments.

Frequently Asked Questions (FAQs)

Are legal services exempt?

Specified legal services provided by advocates and arbitral tribunals to eligible recipients are exempt, subject to the conditions prescribed under the exemption notification.

Is the transfer of a running business taxable under GST?

No. The transfer of a business as a going concern is exempt from GST.

Where can I check whether a service is exempt?

A taxpayer should refer to:

Section 11 of the CGST Act, 2017
Section 6 of the IGST Act, 2017
Relevant GST Exemption Notifications issued by the Government
Latest amendments and circulars issued by the CBIC

What is a GST exemption? Can a supplier claim Input Tax Credit (ITC) on exempt supplies?

A GST exemption means that no GST is payable on specified goods or services notified by the Government under the CGST Act or IGST Act. Generally, No. A supplier making exclusively exempt supplies cannot claim Input Tax Credit on inputs, input services, or capital goods used for such supplies.

Are healthcare services exempt from GST?

Yes. Most healthcare services provided by hospitals, clinical establishments, authorised medical professionals, ambulance services, and veterinary clinics are exempt, subject to the prescribed conditions.

Is education exempt from GST?

Yes. Services provided by recognised educational institutions to students, faculty, and staff are exempt. Certain examination services and Government-recognised skill development programmes are also exempt.

Is rent received from a residential house taxable under GST?

Renting of a residential dwelling for use as a residence is exempt in cases covered by the applicable GST exemption notification. Taxability depends on the nature of the recipient and the purpose of use.

Is interest charged by banks subject to GST?

Interest on loans, advances, and deposits is generally exempt from GST. However, charges relating to credit card services and other taxable banking services remain liable to GST.

Are agricultural services exempt?

Yes. Most services directly related to cultivation, farm labour, agricultural produce, warehousing, agricultural machinery, and agricultural extension services are exempt.

Conclusion: GST exemptions are an integral part of the Indian GST framework and are intended to protect essential sectors, encourage public welfare, and promote economic growth. Through various exemption notifications, the Government has reduced the tax burden on important areas such as healthcare, education, agriculture, charitable activities, transportation, Government services, banking, insurance, affordable housing, and social welfare programmes. Understanding these exemptions is essential for businesses, professionals, tax practitioners, students, and Government organisations. Incorrect classification of an exempt supply may lead to denial of Input Tax Credit, additional tax liability, interest, penalties, and unnecessary litigation. Since GST exemption notifications are amended from time to time, taxpayers should regularly review the latest notifications, circulars, and judicial decisions before claiming any exemption. Proper documentation and compliance with the prescribed conditions are equally important to ensure that the benefit of exemption is correctly availed. A sound understanding of GST exemptions not only helps in maintaining statutory compliance but also enables businesses to make informed tax decisions, reduce compliance risks, and optimise overall tax efficiency. The exemption categories discussed in this chapter provide a comprehensive overview of the major services currently exempt under GST.

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GST Exemptions Under CGST & IGST Act – Complete Guide with Examples

Introduction to GST Exemption

Meaning of Exempt Supply

Components of Exempt Supply

Features of Exempt Supply

Practical Example

Why Exempt Supplies Are Important

Types of GST Exemptions

Comparison of Different Types of GST Exemptions

Charitable & Religious Services Exempt from GST

Educational Services Exempt from GST

Healthcare Services Exempt from GST

Sports Services Exempt from GST

Government Services Exempt from GST

Agriculture & Allied Services Exempt from GST

Passenger Transportation Services Exempt from GST

Goods Transportation Services Exempt from GST

Entertainment & Admission Fees Exempt from GST

Renting & Residential Accommodation Exempt from GST

Banking Services Exempt from GST

Insurance Services Exempt from GST

Business-related Exemptions under GST

Additional Exemptions under the IGST Act, 2017

Summary Table of Important GST Exemptions

Frequently Asked Questions (FAQs)

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