In the GST regime, when a supply of goods and/or services falls within the purview of charging Section, such supply is chargeable to GST. However, for determining the liability to pay the tax, one needs to further check whether such supply of goods and/or services are exempt from tax or not. Under earlier Service Tax regime, large number of exemptions were enjoyed by the taxpayers through Mega Exemption list for services. These exemptions have been reduced under GST regime.

GST, a destination based tax, which is implemented from 1st July, 2017 after the initial hiccup has been showing the sign of settling down. Apart from numerous benefits like seamless credit, subsuming of multiple taxes into one basket, elimination of cascading of taxes etc., Government has also explicitly provided various exemptions under GST. Most of the exemptions provided are pari materia to the erstwhile law. However unlike the earlier law on the same product multiple demands at different stages possible is the incorrect rate or exemption is claimed.

Although claiming exclusion is akin to claiming benefit of exemption as no tax is paid is either situation, but there exists a difference between non-taxable and exempt supplies. Further, an exemption may be absolute, partial, conditional or unconditional. Considering these intricacies of the different exemption provided to services under the GST, the Indirect Taxes Committee of ICAI has come up with a publication titled “Background Material on Exempted Services under GST” which inter-alia provides the type of exemptions, legal framework and in-depth analysis of exemption of services under GST.

Considering the importance of exemptions of services under GST, the Indirect Taxes Committee of ICAI has come up with a publication titled “Background Material on Exempted Services under GST” wherein all exemptions available for various services like health care, education etc. have been discussed in details with illustration and examples. The publication also highlights the situations when exemption would be available or not based on provider or recipient of services like few exemptions are available only if supply is being provided to the Government.

Download Background Material on Exempted Services under GST

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June 2021