GST Exemptions and Concessions
GST refers to Goods and Services Tax which came into action in the year 2017. It’s a unique and unified taxation system that replaced various minor as well as major taxes which were charged at various steps of production and distribution. GST, though, brings a lot of benefits to businesses in the form of components such as ITC or Input Tax Credit. But at the same time, it can often lead to an increase in the rates of the products, making them even more expensive. This article discusses the offered exemptions and concessions under GST.
However, the government has either exempted or given concessions to some of the goods from GST (Goods and Services Tax). These concessions are designed to promote economic growth, provide relief to specific sectors, and so on. It is beneficial to the manufacturers dealing in those categories.
Sectorwise GST Exemptions and Concessions
- GST is not applied to essential goods or basic goods such as unprocessed food items such as fresh vegetables, grains, milk and so on. The products that are needed for survival. The government gives agricultural products and services GST concessions.
- Another major GST compensation is there in healthcare and medical services. This is done to ensure the affordability and accessibility of basic healthcare facilities for people belonging to all sorts of financial statuses. This mainly includes diagnosis, treatment, pharmaceutical, and consultation charges provided by professional doctors, ambulance services and so on are given GST concessions.
- The Indian government also collectively decided to exclude educational services and goods from the GST tax to provide free and fair education to all the children of the nation. So, there is no GST applied to the school fees paid by the parents as well as on the purchase of the books.
- Apart from the goods and services that are fully exempted from the GST there are others which are given concessions from GST. It can be seen as the small-scale businesses with a turnover of Rs. 1.5 crores in India. Such small-scale businesses can register under the Composition Scheme, paying a comparatively lower tax of around 1% to 6% under GST, which is quite less than the standard GST rates.
- On Construction services, as well lower GST rates are charged. This was implied in order to provide safer and affordable housing for all. As per the Pradhan Mantri Awas Yojana, housing projects are taxed at concessional rates.
- Recently, a new product has been added to the list of GST concessions which is ‘Electrical Vehicles’. The people who will manufacture and purchase electric vehicles will be charged lesser GST as compared to others. The Indian government executed this initiative to promote sustainability.
- Export Services are another example of activities on which GST is not imposed. The export of goods and services is treated as zero-rated supplies under GST. It also means that no GST is charged on exported products. Also, in some cases, the input taxes can be redeemed from the government.
- Textile and Handicraft products also qualify for exemptions and concessions from GST. This was done in order to preserve the cultural roots of a nation and to promote traditional industries, giving support to budding artisans, cultural enthusiasts and so on.Â
- Lastly, a really significant exemption can be seen in religious and charitable activities. In such generous and spiritual activities, no GST is charged by the religious institutions. Along with the religious places, NGOs and charitable trusts are also given relief from GST.
- The government has also taken care of the senior citizens and the people with disabilities. Various devices and medical equipment such as hearing aids, Braille script and even motorized wheelchairs are charged at lower tax rates. In this way, it helps Senior citizens and people with disabilities to cope with their issues easily.
- The local services offered by the local authorities, which are necessary for the proper maintenance of a region, are also GST-free. Such services include water supply, sanitation and proper waste management. Along with this even the modes of entertainment such as newspapers, journals and books are often exempted from GST.
- Transportation services such as metros, local trains and public transports are also exempted from GST.
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Hence, it can be concluded that the Indian government has wisely exempted certain sectors and industries from GST. These benefits regarding GST concessions are not only enjoyed by the owners of those sectors but also by the consumers of those goods. To claim your rightful exemptions and concessions available under GST, reach out to TaxDunia.
