Simplified Guide to GST Exemptions in India

GST is a goods and services tax in India, but certain goods aren’t taxed. They are referred to as “exempted supplies.”

• Full exemptions: No GST at all
  
• Partial exemptions: Reduced tax rates or limitations on claiming back taxes paid on purchases

The government makes the choice as to what gets exempted, typically to assist individuals in being able to afford necessary items or fund necessary services.

Some typical exempted goods are:

• Basic healthcare
  
• Education services
  
• Fresh vegetables and fruits
• Services from charitable organizations

If you sell exempted goods, you don’t charge GST to customers. You also can’t, however, claim back the GST paid on related purchases.

Don’t mix up exempted supplies with zero-rated supplies (such as exports). Both charge no GST, but exporters still receive refunds of taxes paid.

Though exemptions reduce the cost for customers, they may complicate tax documentation for businesses.

This is as per the ICAI’s Handbook on Exempted Supplies under GST, 2025.

Refer to the official PDF for Complete information