1. Goods and Service Tax (GST) is a levy on the supply of goods or services, Section 9 of the Central goods and service tax Act, 2017 (CGST Act, 2017) provides for levy and collection of taxes on supply of goods or services at such rate as may be notified but not exceeding the rate of 20% for the intrastate supply of goods and services. (Each state goods and service tax Act, 2017 ( “The SGST Act,2017”) provides for the levy and collection of taxes within State and The Integrate Goods and service provided for the levy and collection of taxes on interstate supply, for the sake of brevity only the CGST Act, 2017 referred in the article). Therefore, each transaction of supply of goods or service liable for payment of taxes, and the supplies who supply the goods or service is required to collect the taxes from the customer unless the said supply of goods or service is
2. Neither a supply of goods nor a supply of service under GST law, or
3. Exempted from payment of taxes
4. Outside the ambit of CGST Act, 2017 for levy and collection
5. Since the GST levy of tax is in the nature of indirect, the burden of the entire payment of taxes is on the customer who receives the goods or service, and the supplier is only acting as a mere intermediary for the collection and remittance to the taxes to the Government. Considering that India is a very large country and has a population of more than 130 Cr, having a greater number of people under below poverty line, it is important for the government to consider the some of supply of goods or services either not to levy a tax or exempt from paying taxes to reduce the tax burden on the customer.
6. Section 11 of CGST Act, 2017 provides for the notifying the certain supply of goods or services for exemption from payment of taxes either with or without condition. In terms of the said section, the government issued the notification 12/2017 – CTR dated 28.06.2017 exempting the various service and the said notification has been amended from time to time, and currently as of date there are more than 80 services are exempted from the payment of taxes.
7. By referring to the above notification, one can easily identify the exemption provided under the notification. However, while interpreting the exemption notification, it is important to identify the type of exemption. To apply, whether the exemption given under notification is applicable or not to the particular transaction
8. In this article, I have analyzed the list of types of exemptions given for the supply of service under the notification 12/2017 – CTR dated 28.06.2017
Types of GST exemption:
| Type | Explanation | Example of entry |
| Entity specific with nature of service provided | The nature of the activity undertaken by the entity is deterring factor along with the nature of service provided by the said entity. |
Entry 1: Services by an entity registered under section 12AA 69[or 12AB] of the Income-tax Act, 1961 (43 of 1961) by way of charitable activities Under the above, exemption is given for an entity that is registered under Section 12AA of the IT Act,1961 and the exemption is appliable to said entity, only if the service undertaken by the said entity is in the nature of charitable activities |
| Service-specific | Under this category, the exemption is applicable for the service, irrespective person who provides the service |
Entry 2: Services by way of transfer of a going concern, as a whole or an independent part thereof Under the above, the exemption is applicable if the service provided qualifies as service of transfer of going concern. |
| Recipient of service-specific | Under this category, the exemption is applicable based on the person who received the service. |
Entry 3: Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution Under the above, the exemption is applicable only if the service recipient is Central government, State government, or local Authority which is engaged in the activity as specified under article 243G or 243W of the Constitution |
| Service provider or Service recipient of service-specific with condition | Under the category, the exemption is applicable to a specific person for providing the service and also receiving services. However, the said service should be received for specific purpose |
Services provided by and to Fédération Internationale de Football Association (FIFA) and its subsidiaries directly or indirectly related to any of the events under FIFA U-17 World Cup 2017 to be hosted in India Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 World Cup 2017 Under the above, FIFA is eligible for providing the service and also receiving the service subject to the condition that the service provided or received is in relation to the FIFA U -17 world cup hosted in India. Further, that, the certificate from the Director (Sport) ministry of youth affairs and sport should be produced |
| A service provider with the condition of value of the consideration received for service | Under this category, Exemption is applicable for the entity who receives the consideration for the service within the specified limit |
Services by an old age home run by Central Government, State Government or by an entity registered under section 12AA 72[or 12AB] of the Income-tax Act, 1961 (43 of 1961) to its residents (aged 60 years or more) against consideration upto twenty-five thousand rupees per month per member, provided that the consideration charged is inclusive of charges for boarding, lodging and maintenance. Under the above, exemption is applicable to the Old age home run by the central government or entity registered under IT Act, 1961 , the person resided should be more than 60 Age. The consideration received per member and per month should be less than 25,000/- |
| Service-specific with an area limit | Under this category, the exemption is applicable to the service provided up to the specific area. |
Services by way of transportation of goods by an aircraft from a place outside India up to the customs station of clearance in India. Under the above category, the service of transportation of goods is exempted from the place outside India to up to the place of customs station |
Author Bio
” Section 11 of CGST Act, 2017 provides for the notifying the certain supply of goods or services for exemption from payment of taxes either with or without condition.”
POSER (:
Does that mean that unless, and until
1. so notified or ;
2. any stipulated condition not satisfied
claim for exemption from GST levy could not be made and/or entertained but be justifiably denied ?!
For instance, among others, one has in mind those types of ‘income’ ,which, under the law on income tax are provided to be not taxable , – e.g. under sec 11 of the IT Act.
Consider the recently reported Ruling by AAR holding that ‘ income ‘ of a visiting professor from his lectures with the objective to ‘educate’ is not exempt but is liable for GST .
BACK/Over >>>