Services that generally do not attract Goods and Services Tax (GST) include essential services like healthcare (hospitals, paramedics), education (school/college tuition), public transportation (non-AC buses, metro), agricultural services, and charitable/religious activities. Other exemptions include government services, residential renting, and specific financial services.
Zero-rated supplies
Fresh fruits, fresh milk, curd, bread, etc. Exports and supplies made to SEZ units or SEZ developers, of both goods and services. Grains, salt, jaggery, etc. Alcohol used for human consumption, natural gas, petrol and its products, etc.
List of exempted goods under GST in India:
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.
These include bank transfers between accounts, stamp duty, depreciation and salary/wages. These are purchases/sales that have a 0% GST rate. Examples include, purchasing items from overseas (exports); purchasing items from within Australia that are not subject to GST, eg. fresh food, some education.
Zero rated supplies in GST are those exports or supplies to SEZ that do not attract any GST. They are beneficial for the economy as they boost exports and generate foreign exchange. They are also advantageous for the exporters as they can claim refund of the input tax credit they paid.
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.
Customers do not pay GST on goods and services that are GST‑free such as basic food, many medical and health services, some education courses, childcare, certain medical aids, and exports.
Taxes subsumed
Other levies that were applicable on inter-state transportation of goods have also been done away with in the GST regime. GST is levied on all transactions such as sale, transfer, purchase, barter, lease, or import of goods and/or services.
GST-Free Items:
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.
Key items exempted from GST:
Exempt supplies under GST include nil-rated supplies, supplies wholly or partially exempted by government notification, and non-taxable supplies like alcoholic liquor for human consumption. Exempt goods and services do not attract GST, and input tax credit (ITC) for such supplies cannot be claimed or utilized.
Inheritances, gifts, cash rebates, alimony payments (for divorce decrees finalized after 2018), child support payments, most healthcare benefits, welfare payments, and money that is reimbursed from qualifying adoptions are deemed nontaxable by the IRS.
These include bank transfers between accounts, stamp duty, depreciation and salary/wages. These are purchases/sales that have a 0% GST rate. Examples include, purchasing items from overseas (exports); purchasing items from within Australia that are not subject to GST, eg. fresh food, some education.
Certain government services and small businesses below the GST registration threshold also qualify for exemption. It's important to note that exempt supplies differ from non-GST supplies. Exempt supplies, like healthcare or education services, are part of the GST system but are not taxed.
List of Services Exempted from GST
Things that are GST-free include: most basic food. some education courses, course materials and related excursions or field trips. some medical, health and care services.
Exports of goods or services or both together and supplies to Special Economic Zone (SEZ) units or developers are considered zero-rated under GST. Yes, one cannot claim ITC for exempt supplies as they do not attract GST, while one can claim refund of tax paid or unutilised ITC for zero-rated supplies.
GST is a 10% tax added to most goods and services sold in Australia, but not everything in the food and beverage sector is treated equally. Some items are GST-free, while others are fully taxable, and understanding the difference can have a direct impact on your pricing, bookkeeping, and compliance.
1. Agriculture and Allied Activities: Certain agricultural activities, such as cultivation, harvesting, threshing, and storage of produce, are exempt from GST. Additionally, supplies of agricultural produce, including cereals, fruits, vegetables, and milk, are exempt from GST.
Items designated as zero-rated can vary by country but typically include essential goods such as basic foodstuffs, prescription medications, and water services. Zero-rated goods are critical in international trade as they are not subject to VAT in cross-border transactions, lowering costs for importing and exporting.
Which services fall under the 5% GST slab? Services such as food delivery, passenger transport, renting of motor vehicles (with fuel cost included), certain job work services, and low-ticket cinema admissions fall under the 5% GST slab.