Non-GST expenses are business expenditures not subject to Goods and Services Tax (GST) because they are exempt, out-of-scope, or classified as non-taxable supplies (e.g., fuel, electricity, salaries). These costs, such as interest, government duties, and raw food, do not incur GST, cannot claim input tax credits, and may not require reporting.
List of Goods Exempted from GST
Office supplies, equipment, rental costs, and professional services are examples of expenses on which input tax can be claimed. Further, input tax cannot be claimed on the following expenses: private use, non-business entertainment, and motor vehicle expenses.
Non-GST Supply
Examples: Electricity, Diesel, Petrol and Alcohol for human consumption are some examples of Non GST supplies.
Certain goods and services are exempt from GST due to their essential nature. This exemption applies based on the type of supply, not the supplier. Example: Healthcare services, educational services, and public utility services (e.g., water supply) are exempt from GST.
Main GST-free products and services
Ineligible ITC: Cases Where Input Tax Credit under GST Cannot Be...
Key items exempted from GST:
What Products Can Be Sold Without GST Registration?
The GSTT exemption may be used for both outright transfers as well as transfers in trust. The allocation of the GSTT exemption is generally reported on a gift or estate tax return (IRS Form 709 or IRS Form 706), though this is not required by law.
It covers expenses such as salaries, electricity, rent, transportation costs, food and beverages, hotel rooms, insurance, legal and professional fees, and more.
Allowable vs. disallowable: Allowable expenses (e.g., staff salaries, office rent) reduce your corporation tax. Disallowable expenses (e.g., client entertainment, fines) cannot be claimed.
Yes, GST Input Tax Credit (ITC) can be claimed on furniture purchases, but only if the furniture is used for business purposes. Businesses can claim ITC on the GST paid for office furniture since it is considered a necessary expense for making taxable supplies.
Supplies which don't come under the scope of the GST are termed as Non-GST supplies. However, these supplies can attract taxes other than the GST as per the jurisdiction of the state or the country. Some examples of such supplies include petrol, alcohol, etc.
Sales that do not include GST in their price are known as GST-free sales. In contrast, sales that have GST included in their price are known as 'taxable sales'. Examples of items that are GST-free include: basic food, such as fruits, vegetables, meat, fish and eggs.
Supplies that have a declared rate of 0% GST. Example: Salt, grains, jaggery etc. Supplies are taxable but do not attract GST, for which ITC cannot be claimed. Example: Fresh milk, Fresh fruits, Curd, Bread etc.
GST-Free Items:
Can I sell on Meesho without a GST number? Yes, you can sell on Meesho without a GST number for certain exempt categories. However, for most product categories, a GSTIN is mandatory as per government regulations.
Zero-rated supplies are supplies of property and services that are taxable at the rate of 0%. This means there is no GST/HST charged on these supplies, but GST/HST registrants may be eligible to claim ITCs for the GST/HST paid or payable on property and services acquired to provide these supplies.
Common Examples of GST Exempt Transactions:
Financial services – Most banking services, interest payments, and insurance premiums. Residential rent – Rental income from residential properties. Donated goods and services – Items or services that are given away without payment.
Fresh milk and pasteurized milk are fully exempt from GST. Further, milk products like curd, lassi, buttermilk, and paneer also are exempt from GST if sold in form apart from those pre-packaged and labeled.
Zero-rated supplies
Food and Agricultural Products
Fresh fruits and vegetables, for instance, do not attract any tax. Similarly, unprocessed grains like wheat and rice are GST-free. Other exempted items include: Fresh milk.
A taxpayer cannot claim any input credit for GST paid on personal expenses. Again, goods exempted under GST already enjoy 0% GST. ITC cannot be claimed for inputs used in such exempted goods as it will lead to negative taxation. So, ITC on inputs for exempted goods will also have to be removed.