Gst Exempt On Service Provided To Government Organisations

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There are various items that are GST exempt On Service Provided To Government Organisations. Similarly, there are also services that are exempt from GST. In this article, you will understand the concepts of GST exemption on services provided to government organizations,

What is Exempt Supply?

The exempted list includes the following types of supplies:

  • All the supplies taxable at a ‘Nil’ rate of tax, 0% tax
  • All the nontaxable supplies which are defined under section 2 (78)- these supplies are not considered taxable under the act (like alcohol or liquor for human consumption)
  • All the supplies which are totally or partially exempted from IGST or CGST amending section 11 of CGST Act or Section 6 of IGST Act

State Govt Exemptions

The state governments are also allowed to grant exemptions from GST. The conditions include:

  • The exemptions have to be in the public interest
  • It has to be recommended by the GST council
  • The exemption has to be issued in form of a notification
  • Registered persons or companies supplying the services and products are not entitled to collect a higher Tax amount and the effective rate mandated by the state government.
  • For exceptional circumstances, exemptions by way of a special order (no notifications are necessary) might be allowed
  • The state government might also impose a total exemption or conditional exemption for specific products and services. The government Exempted from GST
  • All services made by the department of posts in the form of speed post, Life Insurance Express parcel post, and agency services provided directly to a resident, other than the central government, state government, and Union Territory.
  • All the services related to transportation and construction of aircraft or vessels and inside or outside a port or an airport.
  • Transport of goods and services
  • Any of the services mentioned above provided directly to business entities

Services by any government to the business entities

All the services provided by the Central Government, State Government, and Union Territories to a business entity or a company having an aggregate turnover of 20 lakh in a financial year are exempted from paying GST.

However, this exemption is not applicable to the services offered by post railways renting properties, etc. For the services, the government providing the services is liable to pay GST under the term forward charge.

Any chance that turnover exceeds the specific limits (INR 10 lacs in special cases and commonly INR 20 lakhs) the company or business entity has to pay GST under reverse charge.

Services offered by one government to another government

All the services provided by the Central Government State Government Union territory of the local government to another government are exempted from any form of GST. However, this exemption is not applicable to the services supplied by the railways, post, immovable properties, and in relation to the creation of aircraft and vessels. In these cases, the authority of the government has to pay GST.

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Some other exempted services include:

  • All the services provided by the various Government and the local authority while issuing passports, driving licenses, visas, birth certificates, or death certificates are exempted from GST.
  • All the services offered under
  1. Mandatory Registration under any law
  2. Services related to testing, safety checks and certification related to the production and safety of the working professionals consumers, or the public, like fire licenses are also exempted from GST
  3. Penalties and fines are not considered an activity as they are imposed for breaking laws and regulations. Therefore they are not considered a supply of service.
  • All the services provided by the Central Government, State Government, and union territories by assigning the right to use the country’s natural resources to an individual farmer for the cultivation of crops, plants, and animal husbandry. This excludes the rearing of horses, fiber, fuel, raw material, and other products.
  • Supply of water via tankers is also exempted
  • A plot given on lease by the government entity to a municipal or local corporation for the construction of public amenities like toilets is also exempted from GST.

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Moreover, If you want any other guidance relating to GST Registration, please feel free to talk to our business advisors at 8881-069-069.

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