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May 28, 2024

A Beginner's Guide to Tax-Exempt Goods in India

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Shebi Sharma

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The Goods and Services Tax (GST) has replaced various indirect taxes applicable to goods and services. Instead of dealing with multiple taxes like VAT and service tax, we now have a single GST that is charged on the value of goods and services. However, there are instances where no GST is levied, and this is known as GST exemption.

What are GST Exemptions?

GST exemptions refer to specific goods or services that are not covered under the ambit of the GST Act. These exemptions can vary from country to country and change over time. The government grants exemptions for various reasons, such as reducing the tax burden on essential goods and supporting specific sectors.

Types of GST Exemptions

Absolute Exemptions:

These exemptions apply fully without any conditions or restrictions.

  • Examples include services provided by the Reserve Bank of India (RBI) and the supply of certain agricultural products.

Conditional Exemptions:

Conditional exemptions have specific limits, conditions, or restrictions.

  • For instance, hotel services are exempt up to a certain extent but not fully. The conditions may include factors like room tariff limits or the type of hotel.

Partial Exemptions:

Partial exemptions apply to specific scenarios.

  • An example is the exemption for unregistered suppliers who provide goods within the state to a registered person. This exemption only applies under reverse charge if the aggregate value of supply does not exceed Rs. 5000 per day.

Remember, understanding these types of exemptions is important for businesses and consumers alike. By knowing which goods and services fall under these categories, you can navigate the tax landscape more effectively.

Also Read: 7 Easy Steps for Flawless GST Reconciliation in Tally

List of GST Exemptions

Goods Exempt from GST

Blankets & Bedsheets

  • Indian National Flag (HSN Code – 63)

Artificial flowers, Wigs & False Beards

  • Human hair, dressed, thinned, bleached or otherwise worked (HSN Code – 6703)

Bricks, Blocks & Ceramics

  • Idols made of clay (HSN Code – 69)

  • Earthen pot and clay lamps (HSN Code – 69)

Glasses, Mirrors, Flasks

  • Glass bangles (except those made from precious metals) (HSN Code – 7018)

Hand Tools & Cutlery

  • Agricultural implements manually operated or animal driven i.e. Hand tools, such as spades, shovels, mattocks, picks, hoes, forks and rakes; axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and other tools of a kind used in agriculture, horticulture or forestry (HSN Code – 8201)

  • Handloom (weaving machinery)

Industrial Machinery

  • Amber charkha (HSN Code – 8445)

Balloons, Parachutes & Airlift Gear

  • Spacecraft (including satellites) and suborbital and spacecraft launch vehicles (HSN Code – 8802 60 00)

  • Parts of goods of heading 8801 (HSN Code – 8803)

Medical, Chemical & Astronomy

  • Hearing aids (HSN Code – 9021)

Pencil Lighter Toiletries

  • Muddhas made of sarkanda and phool bahari jhadoo (HSN Code – 9603)

  • Slate pencils and chalk sticks (HSN Code – 9609)

  • Slates (HSN Code – 9610 00 00)

Musical Instruments

  • Indigenous handmade musical instruments (HSN Code – 92)

Machinery Lab Chemicals Drugs Medicines

  • Passenger baggage (HSN Code – 9803)

Live Animals

  • Live asses, mules and hinnies (HSN Code – 0101)

  • Bovine animals (Live) (HSN Code – 0102)

  • Live swine (HSN Code – 0103)

  • Sheep and goats (Live) (HSN Code – 0104)

  • Live poultry, that is to say, fowls of the species Gallus domesticus, ducks, geese, turkeys and guinea fowls (HSN Code – 0105)

  • Other live animal such as Mammals, Birds, Insects (HSN Code – 0106)

Meat

  • Meat of bovine animals, fresh and chilled (HSN Code – 0201)

  • Bovine animals’ meat or frozen meat (other than frozen and put up in unit container) (HSN Code – 0202)

  • Meat of swine, fresh, chilled or frozen (other than frozen and put up in unit container) (HSN Code – 0203)

  • Sheep or goats’ meat, fresh meat, chilled meat or frozen meat (other than frozen and put up in unit container) (HSN Code – 0204)

  • Meat of horses, asses, mules or hinnies, fresh, chilled or frozen (other than frozen and put up in unit container) (HSN Code – 0205)

  • Edible offal of bovine animals, swine, sheep, goats, horses, asses, mules or hinnies, fresh, chilled or frozen (other than frozen and put up in unit container) (HSN Code – 0206)

  • Meat and edible offal, of the poultry of heading 0105, fresh, chilled or frozen (other than frozen and put up in unit container) (HSN Code – 0207)

  • Other meat and edible meat offal, fresh, chilled or frozen (other than frozen and put up in unit container) (HSN Code – 0208)

  • Pig fat, free of lean meat, and poultry fat, not rendered or otherwise extracted, fresh, chilled or frozen (other than frozen and put up in unit container) (HSN Code – 0209)

  • Poultry fat, free of lean meat, and pig fat, not rendered or otherwise extracted, salted, in brine, dried or smoked (other than put up in unit containers) (HSN Code – 0209)

  • Meat and edible meat offal, salted, in brine, dried or smoked; edible flours and meals of meat or meat offal, other than put up in unit containers (HSN Code – 0210)

Fish, Meat and Filets

  • Fish seeds, prawn / shrimp seeds whether or not processed, cured or in frozen state (other than goods falling under Chapter 3 and attracting 5%) (HSN Code – 3)

  • Fish, fresh or chilled, excluding fish filets and other fish meat of heading 0304 (HSN Code – 0302) Live fish (HSN Code – 0301)

  • Fish filets and other fish meat (whether or not minced), fresh or chilled (HSN Code – 0304)

  • Crustaceans, whether in shell or not, live, fresh or chilled; crustaceans, in shell, cooked by steaming or by boiling in water live, fresh or chilled (HSN Code – 0306)

  • Molluscs, whether in shell or not, live, fresh, chilled; aquatic invertebrates other than crustaceans and molluscs, live, fresh or chilled (HSN Code – 0307)

  • Aquatic invertebrates other than crustaceans and molluscs, live, fresh or chilled (0308)

Eggs, Honey and Milk Products

  • Natural honey, other than put up in unit container and bearing a registered brand name (HSN Code – 0409)

  • Fresh milk and pasteurized milk, including separated milk, milk and cream, not concentrated nor containing added sugar or other sweetening matter, excluding Ultra High Temperature (UHT) milk (HSN Code – 0401)

  • Curd; Lassi; Buttermilk (HSN Code – 0403)

  • Chena or paneer, other than put up in unit containers and bearing a registered brand name (HSN Code – 0406)

  • Birds’ eggs, in shell, fresh, preserved or cooked (HSN Code – 0407)

Non – Edible Animal Products

  • Human hair, unworked, whether or not washed or scoured; waste of human hair (HSN Code – 0501)

  • All goods i.e. Bones and horn-cores, unworked, defatted, simply prepared (but not cut to shape), treated with acid or gelatinized; powder and waste of these products (HSN Code – 0506)

  • Semen including frozen semen (HSN Code – 0511)

  • All goods i.e. Hoof meal; horn meal; hooves, claws, nails and beaks; antlers; etc. (HSN Code – 050790)

Live Trees and Plants

  • Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage (HSN Code – 6)

Also Read: GST Rules for Small Businesses and Start-ups in India

Vegetables

  • Tomatoes, fresh or chilled (HSN Code – 0702)

  • Cucumbers and gherkins, fresh or chilled (HSN Code – 0707)

  • Potatoes, fresh or chilled (HSN Code – 0701)

  • Onions, shallots, garlic, leeks and other alliaceous vegetables, fresh or chilled (HSN Code – 0703)

  • Cabbages, cauliflowers, kohlrabi, kale and similar edible brassicas, fresh or chilled (HSN Code – 0704)

  • Lettuce (Lactuca sativa) and chicory (Cichorium spp.), fresh or chilled (HSN Code – 0705)

  • Carrots, turnips, salad beetroot, salsify, celeriac, radishes and similar edible roots, fresh or chilled (HSN Code – 0706)

  • Other vegetables, fresh or chilled (HSN Code – 0709)

  • Dried vegetables, whole, cut, sliced, broken or in powder, but not further prepared (HSN Code – 0712)

  • Manioc, arrowroot, salep, Jerusalem artichokes, sweet potatoes and similar roots and tubers with high starch or inulin content, frozen or dried,

  • whether or not sliced or in the form of pellets (inserted w.e.f 14/11/2017 : and put up in unit container and –

    • (a) bearing a registered brand name; or

    • (b) displaying a brand name on which an actionable claim or enforceable right in a court of law is available [other than those where any actionable claim or enforceable right in respect of such brand name has been foregone voluntarily] (HSN Code – 0714)

  • Dried leguminous vegetables, shelled, whether or not skinned or split (HSN Code – 0713)

  • Manioc, arrowroot, salep, Jerusalem, artichokes, sweet potatoes and similar roots and tubers with high starch or inulin content, fresh or chilled; sago pith (HSN Code – 0714)

Fruits and Dry Fruits

  • Coconuts, fresh or dried, whether or not shelled or peeled (HSN Code – 0801)

  • Brazil nuts, fresh, whether or not shelled or peeled (HSN Code – 0801)

  • Other nuts, Other nuts, fresh such as Almonds, Hazelnuts or filberts (Corylus spp.), walnuts, Chestnuts (Castanea spp.), Pistachios, Macadamia nuts, Kola nuts (Cola spp.), Areca nuts, fresh, whether or not shelled or peeled (HSN Code – 0802)

  • Bananas, including plantains, fresh or dried (HSN Code – 0803)

  • Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens, fresh (HSN Code – 0804)

  • Citrus fruit, such as Oranges, Mandarins (including tangerines and satsumas); clementines, wilkins and similar citrus hybrids, Grapefruit,

  • including pomelos, Lemons (Citrus limon, Citrus limonum) and limes (Citrus aurantifolia, Citrus latifolia), fresh (HSN Code – 0805)

  • Grapes, fresh (HSN Code – 0806)

  • Melons (including watermelons) and papaws (papayas), fresh (HSN Code – 0807)

  • Apples, pears and quinces, fresh (HSN Code – 0808)

  • Apricots, cherries, peaches (including nectarines), plums and sloes, fresh (HSN Code – 0809)

  • Other fruit such as strawberries, raspberries, blackberries, mulberries and loganberries, black, white or red currants and gooseberries, cranberries, bilberries and other fruits of the genus vaccinium, Kiwi fruit, Durians, Persimmons, Pomegranates, Tamarind, Sapota (chico), Custard-

  • apple (ata), Bore, Lichi, fresh (HSN Code – 0810)

  • Peel of citrus fruit or melons (including watermelons), fresh (HSN Code – 0814)

Tea, Coffee and Spices

  • Coffee beans, not roasted (HSN Code – 0901)

  • Unprocessed green leaves of tea (HSN Code – 0902)

  • Seeds of anise, badian, fennel, coriander, cumin or caraway; juniper berries [of seed quality] (HSN Code – 0909)

  • Fresh turmeric, other than in processed form (HSN Code – 09103010)

  • Ginger (Fresh), other than in processed form (HSN Code – 09101110)

  • All goods of seed quality (HSN Code – 09)

Edible Grains

  • Wheat and meslin (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1001)

  • Rye (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1002)

  • Barley (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1003)

  • Oats (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1004)

  • Maize (corn) (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1005)

  • Rice (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1006)

  • Grain sorghum (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1007)

  • Buckwheat, millet and canary seed; other cereals such as Jawar, Bajra, Ragi (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1008)

Milling Industry Products

  • Wheat or meslin flour (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1101)

  • Cereal flours other than of wheat or meslin, (maize (corn) flour, Rye flour, etc.) (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1102)

  • Guar meal (HSN Code – 11061010)

  • Cereal groats, meal and pellets (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1103)

  • Flour, of potatoes (other than those put up in unit container and bearing a registered brand name deleted w.e.f 10/11/2017) (HSN Code – 1105

  • Cereal grains hulled (HSN Code – 1104)

  • Flour, of the dried leguminous vegetables of heading 0713 (pulses) (other than guar meal 1106 10 10 and guar gum refined split 1106 10 90), of sago or of roots or tubers of heading 0714 or of the products of Chapter 8 i.e. of tamarind, of singoda, mango flour, etc. (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1106)

Oil Seeds, Fruit and Part of Plants

  • All goods of seed quality (HSN Code – 12)

  • Soya beans, whether or not broken, of seed quality (HSN Code – 1201)

  • Ground-nuts, not roasted or otherwise cooked, whether or not shelled or broken, of seed quality (HSN Code – 1202)

  • Linseed, whether or not broken, of seed quality (HSN Code – 1204)

  • Rape or colza seeds, whether or not broken, of seed quality (HSN Code – 1205)

  • Sunflower seeds, whether or not broken, of seed quality (HSN Code – 1206)

  • Other oil seeds and oleaginous fruits (i.e. Palm nuts and kernels, cotton seeds, Castor oil seeds, Sesamum seeds, Mustard seeds, Safflower

  • (Carthamus tinctorius) seeds, Melon seeds, Poppy seeds, Ajams, Mango kernel, Niger seed, Kokam) whether or not broken, of seed quality (HSN Code – 1207)

  • Seeds, fruit and spores, of a kind used for sowing (HSN Code – 1209)

Hop cones, fresh (HSN Code – 1210)

  • Plants and parts of plants (including seeds and fruits), of a kind used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar purpose, fresh or chilled (HSN Code – 1211)

  • Locust beans, seaweeds and other algae, sugar beet and sugar cane, fresh or chilled (HSN Code – 1212)

  • Cereal straw and husks, unprepared, whether or not chopped, ground, pressed or in the form of pellets (HSN Code – 1213)

  • Swedes, mangolds, fodder roots, hay, lucerne (alfalfa), clover, sainfoin, forage kale, lupines, vetches and similar forage products, whether or not in the form of pellets (HSN Code – 1214)

Gums, Resins, Vegetable SAP & Extracts

  • Lac and Shellac (HSN Code – 1301)

Vegetable Materials and Products

  • Vegetable materials of a kind used primarily for plaiting (for example, bamboos, rattans, reeds, rushes, osier, raffia, cleaned, bleached or dyed cereal straw, and lime bark) (HSN Code – 1401)

  • Unworked coconut shell (HSN Code – 1404)

  • Betel leaves (HSN Code – 4049040)

  • Vegetable materials, for manufacture of jhadoo or broom sticks (HSN Code – 14049090)

Sugar, Jaggery, Honey & bubble Gums

  • Jaggery of all types including Cane Jaggery (gur) and Palmyra Jaggery (HSN Code – 1701 or 1702)

Pizza, Cake, Bread, Pasta & Waffles

  • Puffed rice, commonly known as Muri, flattened or beaten rice, commonly known as Chira, parched rice, commonly known as khoi, parched
  • paddy or rice coated with sugar or gur, commonly known as Murki (HSN Code – 1904)

-Pappad, by whatever name it is known, except when served for consumption (HSN Code – 1905)

  • Bread (branded or otherwise), except when served for consumption and pizza bread (HSN Code – 1905)

Tea & Coffee Extract & Essence

  • Prasadam supplied by religious places like temples, mosques, churches, gurudwaras, dargahs, etc. (HSN Code – 2106)

  • Water, Mineral & Aerated

  • Water (other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container) (HSN Code – 2201)

  • Non-alcoholic Toddy, Neera including date and palm neera (HSN Code – 2201)

  • Tender coconut water other than put up in unit container and bearing a registered brand name (HSN Code – 2202 90 90)

Flours, Meals & Pellets

  • Aquatic feed including shrimp feed and prawn feed, poultry feed & cattle feed, including grass, hay & straw, supplement & husk of pulses, concentrates & additives, wheat bran & de-oiled cake (HSN Code – 2302, 2304, 2305, 2306, 2308, 2309)

Salts & Sands

  • Salt, all types (HSN Code – 2501)

Fossil Fuels – Coal and Petroleum

  • Electrical energy (HSN Code – 27160000)

Gasses and Nonmetals

  • Dicalcium phosphate (DCP) of animal feed grade conforming to IS specification No.5470 : 2002 (HSN Code – 2835)

Drugs & Pharmaceuticals

  • Human Blood and its components (HSN Code – 3002)

All types of contraceptives (HSN Code – 3006)

Fertilizers

  • All goods and organic manure (other than put up in unit containers and bearing a registered brand name) (HSN Code – 3101)

Essential Oils, Beauty Products

  • Kajal (other than kajal pencil sticks), Kumkum, Bindi, Sindur, Alta (HSN Code – 3304)

Insecticides, Artificial Carbon & Graphite

  • Municipal waste, sewage sludge, clinical waste (HSN Code – 3825)

Polymers, Polyethylene, Cellulose

  • Plastic bangles (HSN Code – 3926)

Rubber, Plates, Belt, Condensed Milk

  • Condoms and contraceptives (HSN Code – 4014)

Fuel wood, Wood Charcoal

  • Firewood or fuel wood (HSN Code – 4401)

  • Wood charcoal (including shell or nut charcoal), whether or not agglomerated (HSN Code – 4402)

Newsprint, Uncoated paper & paperboard

  • Judicial, Non-judicial stamp papers, Court fee stamps when sold by the Government Treasuries or Vendors authorized by the Government (HSN Code – 4802)

  • Postal items, like envelope, Post card etc., sold by Government (HSN Code – 4802)

  • Rupee notes when sold to the Reserve Bank of India (HSN Code – 48)

Printed Books, Brochures, Newspapers

  • Cheques, lose or in book form (HSN Code – 4907)

  • Printed books, including Braille books (HSN Code – 4901)

  • Newspapers, journals and periodicals, whether or not illustrated or containing advertising material (HSN Code – 4902)

  • Children’s picture, drawing or coloring books (HSN Code – 4903)

  • Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans and globes, printed (HSN Code – 4905)

SilkWorm Cocoon, Yarn, Waste & Woven Fabrics

  • Silkworm laying, cocoon (HSN Code – 5001)

  • Raw silk (HSN Code – 5002)

  • Silk waste (HSN Code – 5003)

  • Khadi fabric, sold through Khadi and Village Industries Commission(KVIC) and KVIC certified institutions/outlets (HSN Code – 50)

Wool Materials & Waste, Animal Hairs

  • Wool, not carded or combed (HSN Code – 5101)

  • Fine or coarse animal hair, not carded or combed (HSN Code – 5102)

  • Waste of wool or of fine or coarse animal hair (HSN Code – 5103)

Cotton Materials, Synthetics & Woven Fabrics

  • Gandhi Topi (HSN Code – 52)

  • Khadi Yarn (HSN Code – 52)

Flex Raw, Vegetable Materials & Paper Yarn

  • Jute fibers, raw or processed but not spun (HSN Code – 5303)

  • Coconut, coir fiber (HSN Code – 5305)

Note: We have taken reference from Tally Solutions.

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