Exemptions from GST Registration

By GSTBazaar

29th July 2017


With the introduction of GST on 1st July 2017 every taxpayer whose annual turnover exceeds Rs 10 lakhs in north eastern states and hill stations while 20 lakhs in other states is required to obtain GST registration. All the business entities whose annual turnover exceeds the threshold limit are required to obtain GST registration while the taxpayers who were registered under the earlier scheme are required to obtain migration to the new regime.

Following taxpayers are exempted for obtaining registration under the GST regime-

1. Person having turnover less than the threshold limit- Every business entity whose aggregate turnover is less than 10 lakhs in North eastern states and hill stations like (Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand)  and 20 lakhs in other states is not required to obtain registration under Goods and Service Tax

2.Taxpayer supplying NIL rated or Exempted Goods and Services – Every taxpayer who is supplying the goods and services which are either exempted or zero rated are not required to obtain registration under GST regime. Goods and services included in the exemption list of GST are as follows-

•  All unprocessed food items like rice, wheat, bread milk, vegetables, cereals, eggs meat, fish and salt etc.

•  Education services

•  Healthcare services excluding medicines

•  Kids coloring/drawing books.

•  Bindi, Sindoor and bagels etc.

•  Hotels and lodges with the room rent below Rs 1000.

•  Train travel by local and sleeper with ticket value less than Rs 1000.

3.    Taxpayer supplying Agriculture products- Every taxpayer engaged in the agricultural sector and supplying the products out of his cultivation land is exempted from obtaining a registration under GST. Various Agro-inputs like fertilizers, seeds, irrigation (electricity is required), machinery and all other agricultural services are also exempted under GST regime.

4. Persons covered under Reverse Charge- As per the reverse charge mechanism the liability to pay tax shifts from the supplier of goods and services to the recipient of goods and services. Thus, every taxable person who is covered under the reverse charge mechanism is not liable to get registered under the GST regime.  Some of the items covered under the reverse charge mechanism are-

•  Buying goods or services from unregistered dealer

•  Services by E-Commerce Department

•  Services provided by transport agency

•  Services provided by local authority

•  Sponsorship Services

•  Services provided by an insurance agent

•  Manufacturer of specific goods.

•  Transferring or permitting the use of copyright etc.

5. Taxable Person supplying goods and services which are outside the purview of GST- Some items are kept outside the purview of GST that means GST would not be applicable to them. Every taxpayer who is engaged in supplying these goods and services is not required to obtain GST Registration and will continue to stay registered under the previous regime paying the taxes accordingly. The various Goods and Services which are kept outside the purview of GST are as follows-

1. Petroleum Crude and petrol

2. High-Speed Diesel

3. Natural Gas

4. Electricity

5.  Alcohol for Human Consumption

6.  Aviation Turbine Fuel

6.  Activities that are neither considered as the supply of Goods or supply of Services- Taxpayers are engaged in activities that can neither be termed as the supply of services or supply of Goods are not required to obtain registration under GST. These include the following activities-

• Services by an employee.

•  Services by any Court or Tribunal.

•  Functions and duties of –

I.  MPs, MLAs, Members of Panchayats, Municipalities and other local authorities;

II. Person holding any Constitutional Post;

III. Person as a Chairperson or a Member or a Director in a body.

•  Funeral Services.

•  Sale of land and building.

•  Actionable claims (other than the lottery, betting, and gambling).




Join our 14000+ Subscribers who receive Bi-Weekly/Daily GST Tips

Exemptions from GST Registration