10 Common services which are exempt from GST and every common man should know about it!

1.0 Introduction

India took a step towards a revolutionary tax reform on 1^st July 2017. This was a new chapter for the economy of the country. Goods and services tax is the promised reform we were all waiting for. It may or may not have reduced the price of goods for common man but it has hit us all in our jobs, our businesses and our overall economy.

Somewhere down the line, we have all been affected by it. Whether we love it or we hate it but we just can't ignore it and that is quite reason enough to learn something about the tax.

In this article, we will be learning about the exemption under GST. And I believe we have started understanding it as well. 

Further, since we all know what all categories are covered under GST let’s also learn what it does not cover.

2.0 GST exemption on supply of services

There is a list of 81 services that are exempted from GST. In other words, Goods and services tax (GST) is not applicable on these services. The list of services is made for the benefit of every common man. Here in this article we will discuss and learn about the 10 important services exempted from GST which everyone should know about.

#Service No.1 - Pure Labour services for construction of Residential unit

Any service provider of pure labor for building residential premises has been exempted from payment of GST. In easier words, Any service provider providing pure labour services for construction of residential unit is exempt from the payment of GST.

Now it is important to understand that this construction includes only single residential unit. Societies or colonies are not included in it. Also, repair work of a house will not fall under this clause.

#Service No.2 – Renting of residential immovable property for residential use

Many of us earn their livelihood from the rental income only and hence it is important to know whether GST is applicable to us or not. The government also understand the same and hence any supply of services by way of renting of residential immovable property used for the residential purpose shall be exempt from the payment of GST.

It is important to note that any type of commercial space is not included in this. For e.g. an office premise rented for residential purpose in not included or vice-versa.

#Service No.3 – Religious services - important

This clause is pretty obvious in nature because no government wants to tax something which is religious in nature and at the same time beneficial for the general public. Hence, supply of services by any person by way of

• Any ceremony which is religious in nature
• Renting of any place within the property of religious place meant for general public which owned by a trust which is registered under income tax. However, this exemption shall not apply to:
  • Renting of rooms where charge is more than one thousand rupees per day.
  • Renting of community hall, marriage halls or any open area where charge is more than ten thousand per day.
  • Renting of shops or any other space for business where charge is ten thousand or more per month.

#Service No.4 – Hotel, guest house for residential and lodging services

This clause includes hotels, camp sites where people stay overnight or for some days. These premises are used for vacations, travelling and overnight stay. The Service providers of lodging facilities have been exempted from payment of the tax subject to a condition that the daily tariff should not exceed Rs.1000/-. Hence, anything over Rs.1000 shall be taxable under GST.

#Service No.5 – Traveling of passengers with or without belongings

Travelling is not a luxury but a need now days and hence the government also recognizes the fact and hence it has exempted the travelling from the clutches of GST.

This clause covers all the passengers with or without their accompanied belongings traveling by air, carriage, bus, car in the following situations:

• All those travelling by air to/from any of the following state of
  Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim or Tripura or at bagdora located in west bengal.

• People travelling and trasportation of passesngers by non aircondiotioned contract carriage for e.g. in busses, trains etc.

• Other non air conditioned stage carriages like DTC buses etc.

#Service no. 6 – Certain Banking and financial services

Banking and financial services are the services of basic necessity nowadays. Further, the government of India also supports the banking initiatives and therefore exempted the interest charge from the clutches of GST.

Here financial and banking services provided by banks will be under this clause. There are some limitations to it as well

• All those financial services provided by a bank in which consideration which is in interest or discount. For e.g. deposits like FD, loans etc where you get interest of the amount you have given or taken.  

#Services no. 7 – Legal Services by advocates

Lawyers and advocate can provide their services without the payment of GST. This clause is about the legal services provided by advocates or tribunals. However, we shall only discuss the legal services by advocates.

a) A Partnership firm of advocates or an individual as an advocate other than a senior advocate by way of legal services to:

• An advocate or partnership firm of advocates providing legal services.
• Any person other than business entity; or
• A business entity with an aggregate turnover up to Rs.20 lakh in a preceding financial year.

b) A senior advocate by way of legal services to:

• Any person other than business entity; or
• A business entity with an aggregate turnover up to Rs.20 lakh rupees in a financial year.

#Services No.8 - Public Libraries

There are still lakh of students who do not have adequate infrastructure to study properly at home and hence use public libraries to study and gain knowledge.

Therefore, all public libraries where lending of books, publication or knowledge enhancing material is provided are exempt from payment of GST. By this move government has helped, encouraged and made it convinent for its citizen

#Service No.9 – Slaughter house  

Slaughter houses includes all animals and their meat provided in raw form Slaughter houses providing raw meat for consumption purposes does not have GST applicable on them.

Frozen food items like fish, chicken will not come under this category as they are processed foods.

#Service No.10 – Public Conveniences

All types of public facilities like washrooms, lavatories, urinal, and toilets are exempt from payment of GST.

3.0 Conclusion

Slowly but steadily we are all getting used to the goods and services tax. With time we will all learn more things about the tax. This article is to provide you some additional information about GST. If you have any queries you can mail at info@hubco.in for GST consultation and registration.

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