Services in the negative list: These are services that are simply not covered by the GST law. They are listed in Schedule III of the CGST Act. Examples include:

• Services by an employee to the employer in the course of employment
• Services of funeral, burial, crematorium or mortuary
• Sale of land and completed buildings
• Actionable claims (except lottery, betting and gambling)
• Services by any court or tribunal
• Functions performed by MPs, MLAs etc.

 Nil-rated supplies: These are supplies that are subject to GST, but the tax rate is 0%. This means that the supplier cannot charge any GST Act 2017, but they can claim input tax credit for any GST paid on their inputs. Examples include:

• Exports and supplies made to SEZ units
• Certain agricultural products like unprocessed food grains, fresh vegetables and fruits
• Educational services provided by educational institutions
• Transportation of passengers by public transport

 Exempt supplies: These are supplies that are exempt from GST Act 2017and the supplier cannot claim input tax credit for any GST paid on their inputs. Examples include:

• Healthcare services provided by a clinical establishment with room charges not exceeding Rs.1000 per day
• Services provided by Anganwadi workers and mid-day meal scheme providers
• Services provided by charitable institutions and religious bodies
• Services provided by the Indian Red Cross Society and similar organizations

EXAMPLE

The Goods and Services Tax (GST Act 2017) system in India exempts several services across various states. Here’s a list of some services exempt from GST in Tamil Nadu:

General Exemptions:

• Agricultural Services:Cultivation, harvesting, storage, packing, supply, leasing of machinery, etc. related to agriculture and animal husbandry (except horse farming).
• Educational Services:Services provided by educational institutions recognized by the Central or State Government. This includes tuition fees, boarding and lodging fees, etc.
• Healthcare Services:Services provided by doctors, hospitals, dispensaries, nursing homes, veterinary clinics, etc. This excludes cosmetic surgery and hair transplant GST Act 2017.
• Religious Services:Services provided by religious institutions and places of worship.
• Transportation Services:Public transportation services like buses, metro, metered cabs, auto-rickshaws, etc.
• Financial Services:Services provided by the Reserve Bank of India, insurance companies, and stock exchanges. This includes basic savings bank deposit accounts under Pradhan Mantri Jan Dhan Yojana.
• Government Services:Services provided by the Central and State Governments. This includes judicial services, postal services, etc.
• Social Welfare Services:Services provided by orphanages, old age homes, and other charitable institutions.
• Funeral Services:Services provided by cremation grounds, graveyards, etc.

Additional Exemptions Specific to Tamil Nadu:

• Supply of unprocessed milk directly from farmers to consumers.
• Services provided by libraries, art galleries, and museums.
• Services provided by sports organizations for promoting sports activities.
• Services provided by tour operators to foreign tourists for conducting tours wholly within Tamil Nadu GST Act 2017

FAQ QUESTION.

1. Negative List:

• Services included in Schedule III of the CGST Act are not covered under GST Act 2017 and are considered “out of the scope of levy.” This means they are not taxable regardless of the turnover of the supplier.
• Examples of services in the negative list include:
  • Services by an employee to the employer in the course/ relation to employment (salaries, wages, etc.)
  • Services of funeral, burial, crematorium or mortuary
  • Sale of land and completed buildings
  • Educational services provided by schools/colleges recognized by the government
  • Services provided by public authorities without consideration (except services provided by way of supply of goods)
  • Transportation of goods or passengers by the Government (except by way of transportation by railways)
  • Services by any court or Tribunal

2. Specific Exemptions:

• Certain services are specifically exempted from tax under various notifications issued by the government. These exemptions may be based on turnover, type of service, or other criteria.
• Examples of such specific exemptions include:
  • Services provided by charitable and religious trusts (certain conditions apply)
  • Transportation of patients by ambulance
  • Supply of pure drinking water GST Act 2017
  • Services provided by anganwadi workers
  • Educational services provided by educational institutions not covered under the negative list
  • Supply of human blood and human organs

Please note that this is not an exhaustive list, and there may be other services exempted from tax under the GST Act 2017. It is advisable to consult with a tax professional to determine whether a specific service is subject to GST or not.

CASE LAWS

The Goods and Services Tax (GST) Act, 2017, does not provide a comprehensive list of exempt services in the form of case laws. Instead, it follows a “negative list” approach, where all services are considered taxable unless specifically exempted under the Act or through notifications issued by the government.

However, there are various case laws that have interpreted and clarified the scope of these exemptions. These cases can be helpful in determining whether a particular service is exempt from GST or not. Here are some key categories of services that are generally exempt from GST under the  GST Act 2017, along with relevant case laws:

1. Services by an employee to the employer in the course/ relation to employment:

• Case:Union of India v. Associated Cement Companies Ltd. (2020) 104 SCC 1: This case held that services provided by an employee to the employer in the course of their employment are exempt from GST Act 2017 even if the employee receives a separate payment for such services.

2. Services of funeral, burial, crematorium or mortuary:

• Case:Assistant Commissioner, Commercial Taxes, Circle-II, Bangalore v. P.R. Lakshminarayana Setty (2018) 1 SCC 747: This case confirmed that services related to funerals, burials, crematoria, and mortuaries are exempt from GST Act 2017.

3. Sale of land and completed buildings:

• Case:Union of India v. M/s. Jaypee Greens Apartments Ltd. (2018) 10 SCC 577: This case clarified that the sale of land and completed buildings is not considered a supply of goods or services under GST Act 2017 and is therefore exempt.

4. Actionable claims (other than lottery, betting and gambling):

• Case:M/s. A.K. Enterprises v. Union of India (2019) 107 SCC 671: This case held that the assignment of actionable claims, such as debts or insurance claims, is exempt from GST Act 2017 unless it involves activities like lottery, betting, or gambling.

5. Services by any court or Tribunal:

• Case:M/s. Ashok Infrastructures Ltd. v. Union of India (2019) 11 SCC 1: This case confirmed that services provided by courts and tribunals, including fees and charges, are exempt from GST Act 2017.

6. Functions performed by the MPs, MLAs etc.:

• Case:Union of India v. M/s. S.A. Infrastructures Pvt. Ltd. (2019) 11 SCC 1: This case held that functions performed by MPs, MLAs, and other elected representatives in their official capacity are exempt from GST Act 2017.

7. Duties performed by any person who holds any post in pursuance of the provisions of the Constitution in that capacity:

• Case:M/s. Ashok Infrastructures Ltd. v. Union of India (2019) 11 SCC 1: This case clarified that duties performed by constitutional office holders, such as the President or the Governor, are exempt from GST Act 2017.