Any activity becomes supply in accordance with Section 7 of CGST Act, 2017. After becoming supply, one need to check whether this supply is schedule III item or not? After this test, that supply goes to the test of exemptions which are given under section 11 of CGST Act, 2017. Under section 11, Notification No. 12/ 2017- Central Tax (Rate) dated 28th June, 2017 (as amended from time to time) is issued.
In this article, author has analysed and gathered together all the exemptions which are for Government related Services provided to or by central government, state government or union territory or local authority or a government entity or governmental authority. Also, various definitions of the terms used under these exemptions are produced herein.
| Category | S.I. No | Chapter, Section, Heading, Group or Service Code | Description of service | Rate | Condition |
| 3.Government related | 3 | Chapter 99 | 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 or a Governmental authority [or a Government Entity] 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. | Nil | Nil |
| 3A | Chapter 99 | Composite supply of goods and services in which the value of supply of goods constitutes not more than 25 per cent. of the value of the said composite supply provided to the Central Government, State Government or Union territory or local authority or a Governmental authority or a Government Entity 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. | Nil | Nil | |
| 4 | Chapter 99 | Services by Central Government, State Government, Union territory, local authority or governmental authority by way of any activity in relation to any function entrusted to a municipality under Article 243 W of the Constitution. | Nil | Nil | |
| 5 | Chapter 99 | Services by a [Central Government, State Government, Union territory, local authority or Governmental Authority by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution. | Nil | Nil | |
| 6 | Chapter 99 | Services by the Central Government, State Government, Union territory or local authority excluding the following services:
|
Nil | Nil | |
| 7 | Chapter 99 | Services provided by the Central Government, State Government, Union territory or local authority to a business entity with an aggregate turnover of up to twenty lakh rupees (ten lakh rupees in case of a special category state) in the preceding financial year.
Explanation – For the purposes of this entry, it is hereby clarified that the provisions of this entry shall not be applicable to-
|
Nil | Nil | |
| 8 | Chapter 99 | Services provided by the Central Government, State Government, Union territory or local authority to another Central Government, State Government, Union territory or local authority:
Provided that nothing contained in this entry shall apply to services: 1. by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than the Central Government, State Government, Union territory; 2. in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; 3. of transport of goods or passengers |
Nil | Nil | |
| 9 | Chapter 99 | Services provided by Central Government, State Government, Union territory or a local authority where the consideration for such services does not exceed five thousand rupees:
Provided that nothing contained in this entry shall apply to: 1. services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than the Central Government, State Government, Union territory; 2. services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; 3. transport of goods or passengers : Provided further that in case where continuous supply of service, as defined in sub-section (33) of section 2 of the Central Goods and Services Tax Act, 2017, is provided by the Central Government, State Government, Union territory or a local authority, the exemption shall apply only where the consideration charged for such service does not exceed five thousand rupees in a financial year. |
Nil | Nil | |
| 9C | Chapter 99 | Supply of service by a Government Entity to Central Government, State Government, Union territory, local authority or any person specified by Central Government, State Government, Union territory or local authority against consideration received from Central Government, State Government, Union territory or local authority, in the form of grants. | Nil | Nil | |
| 9D | Chapter 99 | Services by an old age home run by Central Government, State Government or by an entity registered under section 12AA of the Income Tax Act, 1961 (43 of 61) to its residents (aged 60 years or more) against consideration up to twenty-five thousand rupees per month per member, provided that the consideration charged is inclusive of charges for boarding, lodging and maintenance. | Nil | Nil
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| 11A | Heading 9961 or Heading 9962 | Service provided by Fair Price Shops to Central Government, State Government or Union territory by way of sale of food grains, kerosene, sugar, edible oil, etc. under Public Distribution System against consideration in the form of commission or margin. | Nil | Nil | |
| 11A | Heading 9961 or Heading 9962 | Service provided by Fair Price Shops to Central Government, State Government or Union territory by way of sale of food grains, kerosene, sugar, edible oil, etc. under Public Distribution System against consideration in the form of commission or margin. | Nil | Nil | |
| 34A | Heading 9971 | Services supplied by Central Government, State Government, Union territory to their undertakings or Public Sector Undertakings (PSUs) by way of guaranteeing the loans taken by such undertakings or PSUs from the banking companies and financial institutions. | Nil | Nil] | |
| 40 | Heading
9971 or Heading 9991 |
Services provided to the Central Government, State Government, Union territory under any insurance scheme for which total premium is paid by the Central Government, State Government, Union territory. | Nil | Nil | |
| 41 | Heading 9972 | Upfront amount (called as premium, salami, cost, price, development charges or by any other name) payable in respect of service by way of granting of long term lease of (thirty years, or more) of industrial plots or plots for development of infrastructure for financial business, provided by the State Government Industrial Development Corporations or Undertakings or by any other entity having 50 per cent, or more ownership of Central Government, State Government, Union territory to the industrial units or the developers in any industrial or financial business area. | Nil | Provided that the leased plots shall be used for the purpose for which they are allotted, that is, for industrial or financial activity in an industrial or financial business area:
Provided further that the State Government concerned shall monitor and enforce the above condition as per the order issued by the State Government in this regard: Provided also that in case of any violation or subsequent change of land use, due to any reason whatsoever, the original lessor, original lessee as well as any subsequent lessee or buyer or owner shall be jointly and severally liable to pay such amount of central tax, as would have been payable on the upfront amount charged for the long term lease of the plots but for the exemption contained herein, along with the applicable interest and penalty Provided alsothat the lease agreement entered into by the original lessor with the original lessee or subsequent lessee, or sublessee, as well as any subsequent lease or sale agreements, for lease or sale of such plots to subsequent lessees or buyers or owners shall incorporate in the terms and conditions, the fact that the central tax was exempted on the long term lease of the plots by the original lessor to the original lessee subject to above condition and that the parties to the said agreements undertake to comply with the same. |
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| 42 | Heading
9973 or Heading 9991 |
Services provided by the Central Government, State Government, Union territory or local authority by way of allowing a business entity to operate as a telecom service provider or use radio frequency spectrum during the period prior to the 1st April, 2016, on payment of license fee or spectrum user charges, as the case may be. | Nil | Nil | |
| 47 | Heading 9983 or Heading 9991 | Services provided by the Central Government, State Government, Union territory or local authority by way of-
1. registration required under any law for the time being in force; 2. testing, calibration, safety check or certification relating to protection or safety of workers, consumers or the public at large, including fire license, required under any law for the time being in force. |
Nil | Nil | |
| 51 | Heading 9984 | Services provided by the Goods and Services Tax Network to the Centra Government or State Governments or Union territories for implementation of Goods and Services Tax. | Nil | Nil | |
| 61 | Heading 9991 | Services provided by the Central Government, State Government, Union territory or local authority by way of issuance of passport, visa, driving licence, birth certificate or death certificate. | Nil | Nil | |
| 62 | Heading 9991 or Heading 9997 | Services provided by the Central Government, State Government, Union territory or local authority by way of tolerating non-performance of a contract for which consideration in the form of fines or liquidated damages is payable to the Central Government, State Government, Union territory or local authority under such contract. | Nil | Nil | |
| 63 | Heading 9991 | Services provided by the Central Government, State Government, Union territory or local authority by way of assignment of right to use natural resources to an individual farmer for cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products. | Nil | Nil | |
| 64 | Heading 9991 or Heading 9973 | Services provided by the Central Government, State Government, Union territory or local authority by way of assignment of right to use any natural resource where such right to use was assigned by the Central Government, State Government, Union territory or local authority before the 1st April, 2016:
Provided that the exemption shall apply only to tax payable on one time charge payable, in full upfront or in instalments, for assignment of right to use such natural resource. |
Nil | Nil | |
| 65 | Heading 9991 | Services provided by the Central Government, State Government, Union territory by way of deputing officers after office hours or on holidays for inspection or container stuffing or such other duties in relation to import export cargo on payment of Merchant Overtime charges. | Nil | Nil | |
| 65B | Heading 9991 or any other Heading | Services supplied by a State Government to Excess Royalty Collection Contractor (ERCC) by way of assigning the right to collect royalty on behalf of the State Government on the mineral dispatched by the mining lease holders.
Explanation.—”Mining lease holder” means a person who has been granted mining lease, quarry lease or license or other mineral concession under the Mines and Minerals (Development and Regulation) Act, 1957 (67 of 1957), the rules made thereunder or the rules made by a State Government under subsection (1) of section 15 of the Mines and Minerals (Development and Regulation) Act, 1957. |
Nil | Provided that at the end of the contract period, ERCC shall submit an account to the State Government and certify that the amount of goods and services tax deposited by mining lease holders on royalty is more than the goods and services tax exempted on the service provided by State Government to the ERCC of assignment of right to collect royalty and where such amount of goods and services tax paid by mining lease holders is less than the amount of goods and services tax exempted, the
exemption shall be restricted to such amount as is equal to the amount of goods and services tax paid by the mining lease holders and the ERCC shall pay the difference between goods and services tax exempted on the service provided by State Government to the ERCC of assignment of right to collect royalty and goods and services tax paid by the mining lease holders on royalty.] |
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| 72 | Heading 9992 | Services provided to the Central Government, State Government, Union territory administration under any training program for which total expenditure is borne by the Central Government, State Government, Union territory administration. | Nil | Nil | |
| 1. “vessel” has the same meaning as assigned to it in clause (z) of section 2 of the Major Port Trusts Act, 1963 (38 of 1963); | |||||
| 2. “aircraft” has the same meaning as assigned to it in clause (1) of section 2 of the Aircraft Act, 1934 (22 of 1934); | |||||
| 3.”airport” has the same meaning as assigned to it in clause (b) of section 2 of the Airports Authority of India Act, 1994 (55 of 1994); (h) “approved vocational education course” means,—
(i) a course run by an industrial training institute or an industrial training center affiliated to the National Council for Vocational Training or State Council for Vocational Training offering courses in designated trades notified under the Apprentices Act, 1961 (52 of 1961); or (ii) a Modular Employable Skill Course, approved by the National Council of Vocational Training, run by a person registered with the Directorate General of Training, Ministry of Skill Development and Entrepreneurship; |
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| 4.”banking company” has the same meaning as assigned to it in clause (a) of section 45A of the Reserve Bank of India Act, 1934 (2 of 1934); | |||||
| 5.”financial institution” has the same meaning as assigned to it in clause (c) of section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934).] | |||||
| 6.”Governmental Authority” means an authority or a board or any other body, –
(i) set up by an Act of Parliament or a State Legislature; or (ii) established by any Government, with 90 per cent or more participation by way of equity or control, to carry out any function entrusted to a Municipality under article 243W of the Constitution or to a Panchayat under article 243G of the Constitution; |
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| 7.”Government Entity” means an authority or a board or any other body including a society, trust, corporation,
(i) set up by an Act of Parliament or State Legislature; or (ii) established by any Government, with 90 per cent or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government, Union Territory or a local authority;] |
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| 8. “interest” means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) but does not include any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilized; | |||||
| 9. “port” has the same meaning as assigned to it in clause (q) of section 2 of the Major Port Trusts Act, 1963 (38 of 1963) or in clause (4) of section 3 of the Indian Ports Act, 1908 (15 of 1908); | |||||
| 10. “renting in relation to immovable property” means allowing, permitting or granting access, entry, occupation, use or any such facility, wholly or partly, in an immovable property, with or without the transfer of possession or control of the said immovable property and includes letting, leasing, licensing or other similar arrangements in respect of immovable property; | |||||
| 11. special category States” shall mean the States as specified in sub-clause (g) of clause (4) of article 279A of the Constitution | |||||
DISCLAIMER: This article is merely a general guide meant for knowledge purposes only. All the references or content are for educational purposes only and do not constitute a legal advice. We do not accept any liabilities whatsoever for any losses caused directly or indirectly by the use/reliance of any information or conclusion contained in this publication. Prior to acting upon this publication, you’re suggested to seek the advice. This work is entirely in the interest of profession and to contribute into my beloved subject of GST.
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