Non Taxable GST Goods and Service

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Non Taxable GST Goods and Service

The Goods and Services Tax, as defined by the Constitution is, “Any tax on supply of goods, or services or both, except for taxes on the supply of the alcoholic liquor for human consumption”. The GST Act specifies certain transactions that cannot be classified as a supply of goods or services. The purpose of this article is to elaborate on this concept in detail. The following transactions are not applicable to the terminology of “supply of goods or services” under GST.

Services by an Employee to an Employer

Supply of services by an employee to an employer is devoid of the concept of “supply of goods or services”. It is also exclusive of GST, except for certain scenarios like personal favours to an employee, or gifts above the value of 50,000.

Services of Court or Tribunal

Services by any Court or Tribunal established by any law can opt-out from registering GST as deemed forcible for the time being.

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Sale of Land and Building

Sale of land and sale of completed buildings after the certificate of completion are exempted from GST. It cannot be classified as a “supply of goods or services”.

Services Performed by Specified Members

The below-mentioned personnel can opt-out from registering GST for providing any services and avoid mentioning the concepts of “supply of goods or services”:

  • Members of Parliament;
  • Members of State Legislature;
  • Members of Panchayats;
  • Members of Municipalities;
  • Members of other local authorities;
  • Chairperson;
  • A Member, or a Director in an establishment of the Central or State Governments

Activities Related to the Government

Functions of the Central Government or State Government, related to the Panchayat, is exempt from GST. Hence, it cannot be brought into the concept of “Supply of Goods or Services”.

Death Rituals

Exemption of GST shall apply for services provided to the deceased, like funeral, burial, crematorium or mortuary and transportation.

Inter-State movement of modes of conveyance

Inter-state movements, carrying passengers or goods, or any movements for repair and maintenance of the vehicle, is exempted. It cannot be classified under “supply of goods or services”.  Point to be noted – Movements for the supply of conveyance itself, for example- the delivery of a vehicle for sale, is inclusive of the terminology and hence taxable under GST.

Actionable Claims

All the actionable claims, except lottery, betting and gambling are exclusive of the terminology of “supply of goods and services.”

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Post by Sreeram Viswanath

IndiaFilings is India's largest online compliance services platform dedicated to helping people start and grow their business, at an affordable cost. We were started in 2014 with the mission of making it easier for Entrepreneurs to start their business. We have since helped start and operate tens of thousands of businesses by offering a range of business services. Our aim is to help the entrepreneur on the legal and regulatory requirements, and be a partner throughout the business lifecycle, offering support at every stage to ensure the business remains compliant and continually growing.