List of exempted items from GST

The Goods and Services Tax (GST) in India was implemented on July 1, 2017. Even
after two months of GST roll out, there is much confusion on what products come
under GST and what not. Here is the list of products that are kept outside the purview
of GST:
* Animal feed
* Aquatic feed
* Betel leaves
* Bread
* Butter milk
* Children's' picture, drawing or colouring books
* Coconuts
* Contraceptives (Condoms)
* Curd
* Earthen pot and clay lamps
* Educational services
* Eggs
* Fire wood
* Fish
* Fresh fruits
* Fresh milk
* Fresh vegetables
* Gandhi topi
* Hand operated agriculture equipments
* Hearing aids
* Human blood
* Human hair
* Indian national flag
* Indigenous handmade musical instruments
* Jaggery
* Judicial, Nonjudicial stamp papers, Court fee stamps
* Khadi yarn
* Kumkum, Bindi, Sindur
* Lassi
* Live animals
* Live trees and plants
* Medical services
* Municipal waste, sewage sludge, clinical waste
* Non-alcoholic Toddy, Neera
* Oraganic manure
* Pappad
* Plastic bangles
* Poultry feed & cattle feed
* Prasad (sacred food)
* Printed books, including Braille books and newspaper, periodicals & journals
* Puffed rice (muri)
* Puja samagri
* Raw jute
* Raw silk
* Raw wool
* Salt
* Semen
* Slates, Slate pencils and chalk sticks
* Tender coconut water
* Unbranded atta (flour) and maida
* Unbranded besan (gram flour)
* Unbranded natural honey
* Unpacked foodgrains (Cereals, pulses)
* Unpacked paneer
 * Water (other than aerated, mineral, purified)
* Wood charcoal

GST Council Introduction

In order to implement GST, Constitutional (122nd Amendment) Bill (CAB for short) was introduced in the
Parliament and passed by Rajya Sabha on 03rd August, 2016 and Lok Sabha on 08th August, 2016. The CAB
was passed by more than 15 states and thereafter Hon’ble President gave assent to “The Constitution (One
Hundred And First Amendment) Act, 2016” on 8th of September, 2016. Since then the GST council and been
notified bringing into existence the Constitutional body to decide issues relating to GST.
On September 16, 2016, Government of India issued notifications bringing into effect all the sections of CAB
setting firmly into motion the rolling out of GST. This notification sets out an outer limit of time of one year,
that is till 15-9-2017 for bringing into effect GST.

GST COUNCIL
As per Article 279A (1) of the amended Constitution, the GST Council has to be constituted by the President
within 60 days of the commencement of Article 279A. The notification for bringing into force Article 279A
with effect from 12th September, 2016 was issued on 10th September, 2016.
As per Article 279A of the amended Constitution, the GST Council which will be a joint forum of the Centre
and the States, shall consist of the following members: -
 Union Finance Minister - Chairperson
 b) The Union Minister of State, in-charge of Revenue of finance - Member
 c) The Minister In-charge of finance or taxation or any other Minister nominated by each State Government -
Members
As per Article 279A (4), the Council will make recommendations to the Union and the States on important
issues related to GST, like the goods and services that may be subjected or exempted from GST, model GST
Laws, principles that govern Place of Supply, threshold limits, GST rates including the floor rates with bands,
special rates for raising additional resources during natural calamities/disasters, special provisions for certain
States, etc.
The Union Cabinet under the Chairmanship of Prime Minister Shri Narendra Modi approved setting up of GST
Council on 12th September, 2016 and also setting up its Secretariat as per the following details:
 (a) Creation of the GST Council as per Article 279A of the amended Constitution;
 b) Creation of the GST Council Secretariat, with its office at New Delhi;
 (c) Appointment of the Secretary (Revenue) as the Ex-officio Secretary to the GST Council;
 (d) Inclusion of the Chairperson, Central Board of Excise and Customs (CBEC), as a permanent invitee (non-
voting) to all proceedings of the GST Council;
 (e) Create one post of Additional Secretary to the GST Council in the GST Council Secretariat (at the level of
Additional Secretary to the Government of India), and four posts of Commissioner in the GST Council
Secretariat (at the level of Joint Secretary to the Government of India). The Cabinet also decided to provide for
adequate funds for meeting the recurring and non-recurring expenses of the GST Council Secretariat, the entire
cost for which shall be borne by the Central Government. The GST Council Secretariat shall be manned by
officers taken on deputation from both the Central and State Governments.
 GST Council Meetings
GST Council has met seventeen times since its constitution and some important decisions taken in the GST
Council meeting are:-
 Rules for conduct of business in GST Council.
 Timetable for implementation of GST.
 The threshold limit for exemption from levy of GST would be Rs. 20 lakhs for the States except for the Special
Category States, as enumerated in Article 279A of the Constitution, for which it will be Rs 10 Lakhs).
 The threshold for availing the Composition scheme would be Rs. 75 lakhs in States other than the North East
States, Sikkim and Himachal Pradesh where the threshold for availing the Composition scheme would be Rs.
50 lakhs.The GST Council has also recommended that manufacturers of the following goods shall not be
eligible for the Composition Levy; Ice cream and other edible ice, whether or not containing cocoa, Pan
masala, Tobacco and manufactured tobacco substitutes. Service providers would be kept out of the
Composition Scheme, except restaurant services.
 To compensate States for 5 years for loss of revenue due to implementation of GST, the base year for the
revenue of the State would be 2015-16 and a fixed growth rate of 14% will be applied to it.
 Approval of the Draft GST Rules on registration, payment, return, refund and invoice, valuation, input tax
credit, composition and transitional provisions.
 All entities exempted from payment of indirect tax under any existing tax incentive scheme would pay tax in
the GST regime and the decision to continue with any incentive scheme shall be with the concerned State or
Central government. In case, the State or Central Government decides to continue with any existing
exemption/incentive scheme; it will be administered by way of a reimbursement mechanism.
 Adoption of four slabs tax rate structure of 5%, 12%, 18% and 28%. In addition, there would be a category of
exempt goods and further a cess would be levied on certain goods such as luxury cars, aerated drinks, pan
masala and tobacco products, over and above the rate of 28% for payment of compensation to the states.
 GST rates on 1211 items were approved at the 14th GST Council meeting held at Srinagar on 18th and 19th of
May 2017.
 At the 15th GST Council meeting held at New Delhi on 3rd June 2017, tax rates on the remaining goods were
approved.
 28 states, and 2 Union Territories with Legislatures (Delhi and Puducherry) have already passed their
respective State GST Bill in their State Assemblies.
 Issue of cross empowerment and administrative division of taxpayers between the States and Centre has been
resolved.
The Central Goods and Services Tax bill, Integrated Goods and Services Tax bill, Union Territories (without
legislature) Goods and Services Tax bill and Goods and Services Tax (Compensation to States) bill have been
passed by the Lok Sabha on 29.03.2017 and by the Rajya Sabha on 06.04.2017.

GST council is a governing body to regulate and direct each and every step for the implementation of goods
and service tax in the nation with decisions over tax rates and further implementation measures. GST council
assimilates suggestions and regulation into one form and improvise the changes formally through
notifications and circulars with its departments and finance ministry.
Cabinet Ministry has given approval for the establishment of GST Council while the notification regarding the
establishment of Council was issued on Saturday the 10th day September 2016 and the provisions came into
force on Monday the 12th day of September 2016. Also, the Article 279A having provisions regarding
establishment of GST Council was inserted after Article 279 of THE CONSTITUTION (ONE HUNDRED
AND FIRST AMENDMENT) ACT, 2016. The Union Finance Minister Mr Arun Jaitley who is the head of
GST Council while the First Meeting of the council was held on 22nd and 23rd September 2016 in New Delhi
and the latest 23rd council meeting was held on 10th November 2017 at Guwahati, Assam.

GST Council Constitution

According to the Article 279A, it is on the part of Prime Minister to give the order to constitute the council of
GST within the 60 days from the 12th September 2016 which is already notified by the Government.
Following are the designated personnel, who will form the GST Council together:-

 The Union Finance Minister who will be the CHAIRMAN of the council;
 The Union Minister of State in charge of Revenue or Finance who will be the MEMBER of council;
 ONE MEMBER from each state who is Minister in charge of Finance or Taxation or any other
Minister and anyone of them will be VICE CHAIRMAN of the GST Council who will be mutually
elected by them.

Note

 The Secretary of Revenue Department will work as EX-Officio Secretary to the GST Council,
 The Chairperson of Central Board of Excise and Customs will be the permanent invitee in all the
proceedings of the GST Council who will not have the voting rights.

Quorum and Decision-Making

 For a valid meeting of the members of GST Council, at least 50 percent of the total number of the
member should be present at the meeting.
 Every Decision made during the meeting should be supported by at least 75 percent majority of the
weighted votes of the members who are present and voting at the meeting. In “article 279A” a
principle is there which divides the total weighted vote cast between Central Government and State
Government:-
o The vote of Central Government shall have the weighted of one-third of the total votes
o The votes of State Government shall have the weighted of two third of the total votes, cast in
the meeting
 Any act, decision or proceedings shall not be declared as invalid on the basis of any remaining
deficiency at the time of establishment of GST Council i.e.
o if there is any vacancy remained in the Council
o if there is any defect in the constitution of Council
o if there is any defect in the appointment of a person as a member of the Council
o if there is any procedural non-compliance.

Functions of the GST Council

The GST council will be supposed to make recommendation to the Union and State on the following matters:-

 On subsuming of various taxes, cess, and surcharge in GST.

 Details of services and goods that will be subjected to GST or which will be exempted from GST.
 On Threshold limit below which, services and goods will be exempted from GST.
 On GST rates including floor rate with bands of GST and any special rate for time being to arrange
resources to face any natural calamity.
 Making special provisions for the following states: Arunachal Pradesh, Assam, Jammu and Kashmir,
Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.
  On model law on GST, Principal of levy of GST and the principals which will govern the place of
Supply.

25th Meeting Highlights of GST Council at New Delhi

 07:15 PM – Finance Minister India Arun Jaitley says “necessary to build some
anti-evasion measures” He considered GST eway bill one of them
 07:13 PM – GSTR 3B return filing to be continued till further announcement
 07:12 PM – Petrol under GST will be decided at the next GST Council meeting
 07:06 PM – 40 handicrafts tax slab will be decided in the coming few days by the
council
 07:04 PM – The tax rate reduction on all the items and services will be applicable
from 25th January 2018
 06:59 PM – Composition dealers deposited lesser tax than expected as stated by
Finance minister
 06:55 PM – Arun Jaitley mentioned that 15 states to apply intrastate
GST eway bill on the same date i.e. on 1st February 2018
 06:40 PM – Items re-considered under 18% slab rate from 28% tax rate
 06:30 PM – Next meeting through video conferencing in 10 days
 06:05 PM – No decisions on return filing simplifications today
 06:00 PM – Uttarakhand FM cleared that 29 handicrafts items reduced to 0% GST
 2:05 PM – Nandan Nilekani presents suggestions on GST return filings
 1:45 PM – GST Council holds 35,000 crores for distribution among centre and
states as an IGST collection dividend (Source: CNBC)

How to do GST Online Registration

Here is a Step-by-Step Procedure to Complete GST Online
Registration
 Log on to www.gst.gov.in.
 Click on the ‘Services’ tab on the menu at the top of the page.
 You will have three options, viz. ‘Registration’, ‘Payments, and ‘User Services’.
 Click on ‘Registration’ and select ‘New Registration’.
 You will be redirected to a new page wherein you will have to select whether you are a taxpayer or
a GST practitioner before entering a few details such as the legal name of the business, the state
and district in which the entity is located, Permanent Account Number, email address and mobile
number. This is basically Part-A of the form.
 The details you have entered will have to be verified by the portal, so you will receive a one-time
password or an email for confirmation.
 Based on the kind of business you are running, you will be required to upload a few documents as
requested.
 Part-B of the form will then have to be filled in with a few details after which you will receive the
Application Reference Number through email or SMS.
 Your application will then be verified by a GST officer and it could either be approved or you will
be requested to provide some more details or documents until the authorities have all the required
information to approve your application.
Separate registration has to be done for each state, if a trader has branches in multiple states.
Businesses with more than 1 vertical can register separately for each of them.

As GST has just been introduced, it may take us a while to get used to it and understand it. At
present, all assessees have been asked to register for GST and not procedure is in place for people
who do not want to register for it. They can choose to cancel their registration after registering
though.

Penalties for not Completing GST Online Registration

Offenders who do not pay tax or fail to make the full payment will face a penalty of 10% of the tax
amount. The minimum amount of fine will be Rs.10, 000 if the 10% amounts to anything less. In
case of deliberate tax evasions, offenders will be charged a penalty of 100% of the tax amount. The
penalty will be 10% of the tax due in case of genuine errors.