Exemptions from GST – CA Inter Tax Study Material is designed strictly as per the latest syllabus and exam pattern.
Exemptions from GST – CA Inter Taxation Study Material
Question 1.
Decide with reason whether the following independent services are exempt under CGST Act, 2017 :
- Gokul Residents’ Welfare Association received ₹ 9,000 per month as contribution from each member for sourcing of goods and services from third persons for common use of its members.
- Mr. Vikalp, a performing artist, has received ₹ 1,58,000 from performance of Classical Dance and ₹ 90,000 from acting in TV Serial during the month of June 2018. [May 2019, 4 Marks]
Answer:
| Statutory Provisions | Whether exempt or not | |
| (1) | Service by an unincorporated body or a registered non-profit entity, to its own members by way of share of contribution up to an amount of ₹ 7,500 per month per member for sourcing of goods/services from a third person for the common use of its members in a housing society or residential complex, is exempt | ♦ In the given case, monthly contribution per month per member received by Gokul Residents’ Welfare Association exceeds ₹7,500. ♦ Therefore, exemption will be available up to ₹ 7,500 and GST would be payable on the amount in excess of ₹ 7,500 (viz. ₹ 1,500 in this case). |
| (2) | Services by an artist by way of a performance in folk or classical art forms of music, dance, or theatre, if the consideration charged for such performance is not more than ₹ 1,50,000 are exempt from GST. | ♦ In the given case, since the consideration received by the performing artist “Mr. Vikalp” for performance of classical dance is more than ₹ 1,50,000, said services are NOT EXEMPT.
♦ Further, consideration received for acting in TV serial is also not exempt since said performance is not in folk/classical art forms of theatre. |
Question 2.
Discuss about the exemption available to the services provided by an Old Age Home under the CGST Act, 2017. [Nov. 2019 Old Course, 4 Marks]
Answer:
The services provided by an old age home to its residents are exempt if the following conditions are fulfilled:
- The old age home is run by Central Government, State Govern ment or an entity registered under section 12AA of the Income-tax Act, 1961.
- The consideration charged is up to t 25,000 per month per member.
- The consideration charged is inclusive of charges for boarding, lodging and maintenance.
- The residents of the old age home are aged 60 years or more.
Question 3.
Decide with reason whether the following independent services are exempt under CGST Act, 2017:
(i) M/s Fast Trans, a goods transport agency, transported relief materials meant for victims of Kerala floods being a natural disaster, by road from Delhi to Ernakulam, for a Limited Co.
(ii) Keyan Enterprises, an event organizer, provided services to Breathing Wall Ltd. by way of organizing business exhibition at Pragati Maidan in New Delhi as part of Make in India initiative. [Nov. 2018, 3 Marks]
Answer:
Statutory Provisions
- Services provided by a goods transport agency, by way of transport in a goods carriage of, inter alia, relief materials meant for victims of inter alia natural or manmade disasters are exempt from GST.
- Services provided by an organiser to any person in respect of a business exhibition held outside India is exempt from GST.
Whether exempt or not
- The services provided by M/s Fast Trans will be exempt from GST.
- Since in the given case, the exhibition is organized in India, the services of organization of event by Keyan Enterprises are NOT EXEMPT.
Question 4.
Examine whether GST is exempted on the following independent supply of services:
- Teja & Co. a tour operator provides services to a foreign tourist for tour conducted to Jammu Kashmir and receives a sum of ₹ 3,00,000.
- Ms. Poorva acts as a Team Manager for Indian Sports League (ISL), a recognized sports body, for a Tennis tournament organized by Multi brand retail company and received remuneration of ₹ 2,00,000. [May 2018, 3 Marks]
Answer:
Statutory Provisions
- Services provided by a tour operator to a foreign tourist are exempt from GST provided such services are in relation to a tour conducted wholly outside India.
- Services provided by a team manager to a recognised sports body for participation in a sporting event are exempt from GST provided said sporting event is organised by a recognized sports body.
Whether exempt or not
- Since, in the given case, services provided by Teja & Co. arc in relation to a tour conducted within India, the same are NOT EXEMPT from GST.
- Since, in the given case, the sporting event is not organised by a recognised sports body, the services provided by Ms. Poorva are NOT EXEMPT from GST.
Question 5.
Determine taxable value of supply under GST law with respect to each of the following independent services provided by the registered persons:
| Particulars | Gross amount charged (₹) |
| Fees charged for yoga camp conducted by a charitable trust | 50,000 |
| Amount charged by business correspondent for the services provided to the rural branch of a bank with respect to Savings Bank Accounts | 1,00,000 |
| Amount charged by cord blood bank for preservation of stem cells | 5,00,000 |
| Amount charged for service provided by commentator to a recognized sports body | 5,20,000 |
Answer:
Computation of value of taxable supply
| Particulars | (₹) |
| Fees charged for yoga camp conducted by a charitable trust [Note-1 ] | Nil |
| Amount charged by business correspondent for the services provided to the rural branch of a bank with respect to Savings Bank Accounts [Note-2] | Nil |
| Amount charged by cord blood bank for preservation of stem cells [Note-3] | Nil |
| Service provided by commentator to a recognized sports body [Note-4] | 5,20,000 |
Notes:
- Services by an entity registered under section 12 AA of the Income-tax Act, 1961 by way of charitable activities are exempt from GST. The activities relating to advancement of yoga are included in the definition of charitable activities. So, such activities are exempt from GST.
- Services by business facilitator or a business correspondent to a bank¬ing company with respect to accounts in its rural area branch have been exempted from GST.
- Services provided by cord blood banks by way of preservation of stem cells or any other service in relation to such preservation are exempt from GST.
- Services provided to a recognized sports body only by an individual as a player, referee, umpire, coach or team manager for participation in a sporting event organized by a recognized sports body are exempt from GST. Thus, services provided by commentators are liable to GST.
Question 6.
Asha Medical Centre, a clinical establishment, offers the following services:
| SI. | Particulars | Amount (₹)Excluding GST |
| (i) | Reiki healing treatments. Such therapy is not a recognized system of medicine in terms of section 2(h) of Clinical Establishments Act, 2010. | 10,00,000 |
| (ii) | Plastic surgeries | 20,00,000 |
| (iii) | [One such surgery was conducted to repair cleft lip of a new born baby. Consideration of ₹ 1,00,000 was charged for the same.] | 1,00,000 |
| (iv) | Air ambulance services to transport critically ill patients from distant locations to Asha Medical Centre. Alternative medical treatments by way of Ayurveda. Such therapy is not a recognized system of medicine in terms of section 2(h) of Clinical Establishments Act, 2010 | 2,50,000 |
Asha Medical Centre also operates a cord blood bank which provides ser-vices in relation to preservation of stem cells. You are required to compute the value of supply and GST liability of Asha Medical Centre, if any, in the light of relevant GST provisions. All the services provided by Asha Medical Centre are intra-State supplies. Assume the rates of CGST, SGST and [GST to be 9%, 9% and 18% respectively.]
Answer:
| Sl. No. | Particulars | ₹ |
| (i) | Reiki healing treatments [Working Note-1] | 10,00,000 |
| (ii) | Plastic surgeries [₹ 20,00,000 – ₹ 1,00,000] [Working Note-2] | 19,00,000 |
| (iii) | Air ambulance series to transport critically ill patients from distant locations to the Medical Centre [Working Note-3] | Nil |
| (iv) | Alternative medical treatments by way of Ayurveda [Working Note-4] | Nil |
| (v) | Services provided in relation to preservation of stem cells
[Working Note-5] |
Nil |
| Total Value of supply chargeable to GST | 29,00,000 |
Accordingly, The GST liability of Asha Medical Centre will be as follows:
CGST = ₹ 29,00,000@ 9% = ₹ 2,61,000
SGST = ₹ 29,00,000@ 9% = ₹ 2,61,000
Working Notes:
- Reiki healing treatment is not a recognized system of medicines.
- Health care services’ specifically excludes, inter alia, cosmetic or plastic surgery except when undertaken to restore/reconstruct anatomy/ functions of body affected due to congenital defects, developmental abnormalities, injury or trauma.
- ‘Health care services’ specifically includes services by way of transportation of the patient to and from a clinical establishment.
- Alternative medical treatments by way of Ayurveda are a recognized system of medicines.
- Services provided by cord blood banks by way of preservation of stem cells or any other service in relation to such preservation are exempt from GST. Therefore, services provided in relation to preservation of stem cells by the cord blood bank operated by Asha Medical Centre will be exempt from GST.
The readers may refer the following statutory provisions for conceptual understanding:
Health care services provided by, inter alia, a clinical establishment in India are exempt from GST vibe Notification No. 12/2017-CT (R), dated 28.06.2017. The definition of ‘health care services’ stipulates that such services must be provided in any recognized system of medicines.
As per section 2(h) of Clinical Establishments Act, 2010, recognized system of medicine means allopathy, yoga, naturopathy, ayurveda, homeopathy, siddha and unani system of medicines or any other system of medicines as may be recognized by the Central Government.
Question 7.
Niwas Sadan Charitable Trust is registered under section 12AA of the Income-tax Act, 1961. It owns and manages a temple located at Mathura meant for general public. The temple compound has residential dwellings, rooms, Kalyan Mandapam, Halls and shops. It provides the following information relating to supply of its services for the month of August 2020. You are required to compute the total taxable value of supply for the month of August 2020 assuming that the given amounts are exclusive of GST:
| ₹ | |
| Renting of residential dwellings for use as a residence | 18,00,000 |
| Renting of rooms for pilgrims (Charges per day ₹ 1,200) | 8,00,000 |
| Renting of rooms for devotees (Charges per day ₹ 750) | 6,00,000 |
| Renting of Kalyan Mandapam (Charges per day ₹ 15,000) | 12,00,000 |
| Renting of halls (Charges per day ₹ 7,500) | 10,75,000 |
| Renting of shops for business (Charges per month ₹7 9,500) | 4,75,000 |
| Renting of shops for business (Charges per month ₹ 12,000) | 7,50,000 |
Answer:
Computation of value of supply of Niwas Sadan Charitable Trust for August, 2020
| Particulars | Note | Amount (₹) |
| Renting of residential dwellings for use as residence | 1 | Nil |
| Renting of rooms for pilgrims | 2 | 8,00,000 |
| Renting of rooms for devotees | 3 | Nil |
| Renting of Kalyan Mandapam | 4 | 12,00,000 |
| Renting of halls | 5 | Nil |
| Renting of shops for business . | 6 | Nil |
| Renting of shops for business | 7 | 7,50,000 |
| Value of taxable supply | 27,50,000 |
Note : It has been assumed that the immovable properties are situated inside the precincts of the religious place meant for general public.
Notes:
- It is Exempt as per entry No. 12 of exemption notification of CGST Act, 2017
- Charges per day are not below ₹ 1,000, hence it is taxable
- Charges per day are below ₹ 1,000, it is exempt as per notification No. 12/2017
- Charges per day are not below ₹ 10,000, hence it is taxable
- Charges per day are below ₹ 10,000, it is exempt as per notification No. 12/2017
- Charges per month are below ₹ 10,000, it is exempt as per notification No. 12/2017
- Charges per month are not below ₹ 10,000, hence it is taxable
The readers may refer the following statutory provisions for conceptual understanding:
As per Notification No. 12/2017 (Entry 13 of Exemption Notification of CGST Act) Renting of precincts of a religious place meant for general public, owned/managed by, inter alia, an entity registered as a charitable trust under section 12AA of the Income-tax Act are exempt. However, exemption is not available if:
- charges for rented rooms are ₹ 1,000 per day or more;
- charges for rented community halls, Kalyan Mandapam, open area are ₹ 10,000 per day or more;
- charges for rented shops are ₹ 10,000 per month or more.
Question 8.
ABC Ltd. is engage in providing various service to educational institutional and furnishes you with the following information for the month of April 2018. You are required to determine the value of taxable supply and GST payable thereon if all charges are exclusive of GST. The rate of GST is 18%.
- Renting of immovable property to higher secondary school: ₹ 12,00,000
- Renting of immovable property to commercial coaching centre: ₹ 2,00,000
- Transportation service provided to students of higher secondary school: ₹ 5,00,000
- Outdoor catering service provided to educational institutions running approved vocational courses: ₹ 5,00,000
- Security services provided to pre-nursery school: ₹ 1,25,000
- House keeping and cleaning service in college providing recognized graduation degree: ₹ 5,12,500
- Conduct of examination of ICSI: ₹ 10,00,000
- Placement service provided to ICAI: ₹ 12,00,000
- Development of course contain of ICMA institute: ₹ 2,00,000
- Training of staff of Higher Secondary School: ₹ 1,50,000
Answer:
| Particulars | Note | Amount | |
| 1 | Renting of immovable property to higher secondary school | 2 | 12,00,000 |
| 2 | Renting of imm ovable property to Commercial coaching centre | 2 | 2,00,000 |
| 3 | Transportation services provided to students of higher secondary school | 1 | Exempt |
| 4 | Outdoor catering service provided to Educational running approved vocational courses | 2 | 5,00,000 |
| 5 | Security service provided to pre-nursery school | 1 | Exempt |
| 6 | Housekeeping and cleaning service in college providing recognized graduation degree | 2 | 5,12,500 |
| 7 | Conduct of examination of ICSI | 1 | Exempt |
| 8 | Placement service provided to ICAI | 2 | 12,00,000 |
| 9 | Development of course contain of ICMA institute | 2 | 2,00,000 |
| 10 | Training of staff of higher secondary School. | 2 | 1,50,000 |
| Total Taxable Value of Supply | 39,62,500 | ||
| GST payable @ 18% of ₹ 39,62,500 | 7,13,250 |
Notes:
- Exempt vide Entry No. 66(b) of Exemption Notification No. 12/2017
- Not covered under Entry 66(b) of Notification No. 12/2017, hence Liable to GST
Question 9.
JP Charitable institution, an entity registered under section 12AA of Income-tax Act, 1961 and registered in OST, has furnished you the following details with respect to the activities undertaken by it during the month of January, 2018. You are required to compute its Taxable Value of GST from the information given below, assuming the rate of GST is 18%. Brief reasoning should be part of your answer. [Nov. 2018 Old Course, 5 Marks]
| Amount Excl CST | |
| Membership fees received from members | 10,00,000 |
| Amount received for advancement of educational programs relating to abandoned or orphaned or homeless children | 4,00,000 |
| Amount received for renting of commercial property owned by Trust | 5,00,000 |
| Amount received for counseling of terminally ill person | 3,50,000 |
| Fees charged for Yoga Camp conducted by Trust | 2,00,000 |
| Amount received relating to preservation of Forest & Wildlife | 6,00,000 |
Answer:
Computation of value of taxable supply of JP Charitable Institution for the month of January 2018
| Particulars | Amount | |
| (0 | Membership fees received from members | 10,00,000 |
| (ii) | Amount received for advancement of educational programs relating to abandoned/orphaned/homeless children | Nil |
| (iii) | Amount received for renting of commercial property owned by Trust | 5,00,000 |
| (iv) | Amount received for counseling of terminally ill person | Nil |
| (v) | Fee charged for Yoga Camp conducted by Trust | Nil |
| (vi) | Amount received relating to preservation of Forest & Wildlife | Nil |
| Taxable Value | 15,00,000 |
Note:
Chari of the table activities provided by an entity registered under s Income-tax Act, 1961 are exempt. Since JP Charitable section 12AA Institution is registered under section 12M of the Income-tax Act, 1961 and activities mentioned at points (ii), (iv), (v) and (IA) are included in charitable activities, the same are exempt.
Question 10.
Discuss whether GST is payable in respect of transportation services provided by Raghav Goods Transport Agency in each of the following independent cases:
| Customer | Nature of services provided | Amount charged |
| A | Transportation of milk | ₹ 20,000 |
| B | Transportation of books on a consignment transported in a single goods carriage | ₹ 3,000 |
| C | Transportation of chairs for a single consignee in the goods carriage | ₹ 3,000 |
Answer:
| Customer | Nature of services provided | Note | Amount Charged (₹) | GST Taxability |
| A | Transportation of milk | 1 | 20,000 | Exempt |
| B | Transportation of books on a consignment transported in a single goods carriage | 2 | 3,000 | Payable |
| C | Transportation of chairs for a single consignee in the goods carriage | 3 | 600 | Exempt |
Note:
- Transportation of milk by goods transport agency is exempt as per entry No. 21 of exemption notification of the CGST Act, 2017.
- Exemption is available for transportation of goods only where the 3 consideration for transportation of goods on a consignment transported in a single goods carriage does not exceed ₹ 1,500.
- Transportation of goods where consideration for transportation of all ! goods for a single consignee does not exceed ₹ 750 is exempt.