What is Exempted Good?
Understanding the taxability of goods and services also includes knowing whether a good or service is exempted from GST registration. Upon knowing this, applicants can get clarity on several other factors. Essentially, the GST exemption limit for businesses depends on their annual aggregate turnover.
Previously, businesses with an annual turnover of up to Rs.20 lakhs did not need to register for GST. The amount was Rs.10 lakhs for North-eastern or hilly states like Meghalaya, Sikkim, Mizoram, Arunachal Pradesh, Nagaland, Himachal Pradesh, Manipur, Assam, Tripura, Uttarakhand, and Jammu & Kashmir.
List Of Exempted Goods In Rwanda
XII. Leasing of exempted goods.
XIV. Agricultural inputs and equipment.
Machinery for industries; 1. Raw materials for industries; 2.
The main supply of clean water; 1.
The supply of health and medical services; 1.
Educational services provided to pre-primary, 1.
Transportation of persons by road in bus and 1.
Types of exemption in GST
Given below are the three types of exemptions in GST:
- Absolute: Exemptions without any conditions are absolute exemptions. For example, services by the RBI.
- Conditional: Certain conditions are applicable to some exemptions. Services by hotels, clubs, etc., with a statement of accommodation unit less than Rs.1000 per day, fall under a conditional exemption.
- Partial: Unregistered persons supplying goods within states (intrastate) to a registered individual can enjoy tax exemption under reverse charge only if the aggregate value of a supply does not exceed Rs.5000 per day.
Now let us delve deeper into the GST-exempt items.
Reasons for exemption under GST
The government decides on exempting goods from registering under GST in the following cases:
- In case the GST council recommends the exemption.
- The government might find certain exemptions from GST registration to be beneficial for the public.
- Under exceptional or unforeseen situations, the government might grant exemption by special order.
- Upon providing official notification, one can supply specific goods under a full exemption.
Therefore, from the points mentioned above, it is evident that several sectors can qualify for a GST exemption provided they fulfill some prerequisites. Knowing those criteria in detail will help a taxpayer to register under GST without any hassle.