Notification No. 12/ 2017- Central Tax (Rate) dated 28th June, 2017 (as amended from time to time) describes exemption on services
1. Explain briefly about Exemption for Government related Services
Category S.I.
No
Chapter,
Section,
Heading,
Group or
Service
Code
Description of service Rate Condition
3.Government
related
3 Chapter
99
Pure services (excluding
works contract service or
other composite supplies
involving supply of any
goods) provided to the
Central Government,
State Government or
Union territory or local
authority or a
Governmental authority
[or a Government Entity]
by way of any activity in
relation to any function
entrusted to a Panchayat
under Article 243G of the
Constitution or in
relation to any function
entrusted to a
Municipality under
Article 243W of the
Constitution.
Nil Nil
3A Chapter
99
Composite supply of
goods and services in
which the value of supply
of goods constitutes not
more than 25 per cent. of
the value of the said
composite supply
provided to the Central
Government, State
Government or Union
territory or local
Nil Nil
authority or a
Governmental authority
or a Government Entity
by way of any activity in
relation to any function
entrusted to a Panchayat
under article 243G of the
Constitution or in
relation to any function
entrusted to a
Municipality under
article 243W of the
Constitution.
4 Chapter
99
Services by Central
Government, State
Government, Union
territory, local authority
or governmental
authority by way of any
activity in relation to any
function entrusted to a
municipality under
Article 243 W of the
Constitution.
Nil Nil
5 Chapter
99
Services by a [Central
Government, State
Government, Union
territory, local authority
or Governmental
Authority] by way of any
activity in relation to any
function entrusted to a
Panchayat under Article
243G of the Constitution.
Nil Nil
6 Chapter
99
Services by the Central
Government, State
Government, Union
territory or local
authority excluding the
following services:
1. services by the
Department of
Posts by way of
speed post,
express parcel
post, life
insurance, and
agency services
provided to a
person other than
the Central
Government, State
Government,
Nil Nil
Union territory;
2. services in relation
to an aircraft or a
vessel, inside or
outside the
precincts of aport
or anairport;
3. transport of goods
or passengers; or
4. any service, other
than services
covered under
entries (a) to (c)
above, provided to
business entities.
7 Chapter
99
Services provided by the
Central Government,
State Government, Union
territory or local
authority to a business
entity with an aggregate
turnover of up to twenty
lakh rupees (ten lakh
rupees in case of a
special category state) in
the preceding financial
year.
Explanation – For the
purposes of this entry, it
is hereby clarified that
the provisions of this
entry shall not be
applicable to-
1. Servicesby the
Department of
Posts by way of
speed post,
express parcel
post, life
insurance, and
agency services
provided to a
person other than
the Central
Government, State
Government,
Union territory;
1. in relation
to an
Nil Nil
aircraft or a
vessel,
inside or
outside the
precincts of
a port or an
airport;
2. of transport
of goods or
passengers;
and
2. services by way of
renting of
immovable
property.
8 Chapter
99
Services provided by the
Central Government,
State Government, Union
territory or local
authority to another
Central Government,
State Government, Union
territory or local
authority:
Provided that nothing
contained in this entry
shall apply to services:
1. by the Department
of Posts by way of
speed post,
express parcel
post, life
insurance, and
agency services
provided to a
person other than
the Central
Government, State
Government,
Union territory;
2. in relation to an
aircraft or a
vessel, inside or
outside the
precincts of a port
or an airport;
3. of transport of
goods or
Nil Nil
passengers
9 Chapter
99
Services provided by
Central Government,
State Government, Union
territory or a local
authority where the
consideration for such
services does not exceed
five thousand rupees:
Provided that nothing
contained in this entry
shall apply to:
1. services by the
Department of
Posts by way of
speed post,
express parcel
post, life
insurance, and
agency services
provided to a
person other than
the Central
Government, State
Government,
Union territory;
2. services in relation
to an aircraft or a
vessel, inside or
outside the
precincts of a port
or an airport;
3. transport of goods
or passengers :
Provided further that in
case where continuous
supply of service, as
defined in sub-section
(33) of section 2 of the
Central Goods and
Services Tax Act, 2017,
is provided by the
Central Government,
State Government, Union
territory or a local
authority, the exemption
shall apply only where
the consideration
charged for such service
does not exceed five
Nil Nil
thousand rupees in a
financial year.
9C Chapter
99
Supply of service by a
Government Entity to
Central Government,
State Government, Union
territory, local authority
or any person specified
by Central Government,
State Government, Union
territory or local
authority against
consideration received
from Central
Government, State
Government, Union
territory or local
authority, in the form of
grants.
Nil Nil
9D Chapter
99
Services by an old age
home run by Central
Government, State
Government or by an
entity registered under
section 12AA of the
Income Tax Act, 1961 (43
of 61) to its residents
(aged 60 years or more)
against consideration up
to twenty-five thousand
rupees per month per
member, provided that
the consideration
charged is inclusive of
charges for boarding,
lodging and
maintenance.
Nil Nil
11A Heading
9961 or
Heading
9962
Service provided by Fair
Price Shops to Central
Government, State
Government or Union
territory by way of sale of
food grains, kerosene,
sugar, edible oil, etc.
under Public Distribution
System against
consideration in the form
of commission or margin.
Nil Nil
11A Heading
9961 or
Heading
9962
Service provided by Fair
Price Shops to Central
Government, State
Government or Union
territory by way of sale of
food grains, kerosene,
Nil Nil
sugar, edible oil, etc.
under Public Distribution
System against
consideration in the form
of commission or margin.
34A Heading
9971
Services supplied by
Central Government,
State Government, Union
territory to their
undertakings or Public
Sector Undertakings
(PSUs) by way of
guaranteeing the loans
taken by such
undertakings or PSUs
from the banking
companies andfinancial
institutions.
Nil Nil]
40 Heading
9971 or
Heading
9991
Services provided to the
Central Government,
State Government, Union
territory under any
insurance scheme for
which total premium is
paid by the Central
Government, State
Government, Union
territory.
Nil Nil
41 Heading
9972
Upfront amount (called
as premium, salami,
cost, price, development
charges or by any other
name) payable in respect
of service by way of
granting of long term
lease of (thirty years, or
more) of industrial plots
or plots for development
of infrastructure for
financial business,
provided by the State
Government Industrial
Development
Corporations or
Undertakings or by any
other entity having 50
per cent, or more
ownership of Central
Government, State
Government, Union
territory to the industrial
units or the developers in
any industrial or
financial business area.
Nil Provided that
the leased
plots shall be
used for the
purpose for
which they are
allotted, that
is, for
industrial or
financial
activity in an
industrial or
financial
business area:
Provided
further that
the State
Government
concerned
shall monitor
and enforce
the above
condition as
per the order
issued by the
State
Government in
this regard:
Provided also
that in case of
any violation
or subsequent
change of land
use, due to
any reason
whatsoever,
the original
lessor, original
lessee as well
as any
subsequent
lessee or
buyer or
owner shall be
jointly and
severally liable
to pay such
amount of
central tax, as
would have
been payable
on the upfront
amount
charged for the
long term
lease of the
plots but for
the exemption
contained
herein, along
with the
applicable
interest and
penalty
Provided
alsothat the
lease
agreement
entered into by
the original
lessor with the
original lessee
or subsequent
lessee, or
sublessee, as
well as any
subsequent
lease or sale
agreements,
for lease or
sale of such
plots to
subsequent
lessees or
buyers or
owners shall
incorporate in
the terms and
conditions, the
fact that the
central tax
was exempted
on the long
term lease of
the plots by
the original
lessor to the
original lessee
subject to
above
condition and
that the
parties to the
said
agreements
undertake to
comply with
the same.
42 Heading
9973 or
Heading
9991
Services provided by the
Central Government,
State Government, Union
territory or local
authority by way of
allowing a business
entity to operate as a
telecom service provider
or use radio frequency
spectrum during the
period prior to the 1st
April, 2016, on payment
of licence fee or spectrum
user charges, as the case
may be.
Nil Nil
47 Heading
9983 or
Heading
9991
Services provided by the
Central Government,
State Government, Union
territory or local
authority by way of-
1. registration
required under
any law for the
time being in
force;
Nil Nil
2. testing,
calibration, safety
check or
certification
relating to
protection or
safety of workers,
consumers or the
public at large,
including fire
license, required
under any law for
the time being in
force.
51 Heading
9984
Services provided by the
Goods and Services Tax
Network to the Centra
Government or State
Governments or Union
territories for
implementation of Goods
and Services Tax.
Nil Nil
61 Heading
9991
Services provided by the
Central Government,
State Government, Union
territory or local
authority by way of
issuance of passport,
visa, driving licence,
birth certificate or death
certificate.
Nil Nil
62 Heading
9991 or
Heading
9997
Services provided by the
Central Government,
State Government, Union
territory or local
authority by way of
tolerating non-
performance of a
contract for which
consideration in the form
of fines or liquidated
damages is payable to
the Central Government,
State Government, Union
territory or local
authority under such
contract.
Nil Nil
63 Heading
9991
Services provided by the
Central Government,
State Government, Union
territory or local
authority by way of
assignment of right to
use natural resources to
Nil Nil
an individual farmer for
cultivation of plants and
rearing of all life forms of
animals, except the
rearing of horses, for
food, fibre, fuel, raw
material or other similar
products.
64 Heading
9991 or
Heading
9973
Services provided by the
Central Government,
State Government, Union
territory or local
authority by way of
assignment of right to
use any natural resource
where such right to use
was assigned by the
Central Government,
State Government, Union
territory or local
authority before the 1st
April, 2016:
Provided that the
exemption shall apply
only to tax payable on
one time charge payable,
in full upfront or in
instalments, for
assignment of right to
use such natural
resource.
Nil Nil
65 Heading
9991
Services provided by the
Central Government,
State Government, Union
territory by way of
deputing officers after
office hours or on
holidays for inspection or
container stuffing or
such other duties in
relation to import export
cargo on payment of
Merchant Overtime
charges.
Nil Nil
65B Heading
9991 or
any other
Heading
Services supplied by a
State Government to
Excess Royalty Collection
Contractor (ERCC) by
way of assigning the
right to collect royalty on
behalf of the State
Government on the
mineral dispatched by
Nil Provided that
at the end of
the contract
period, ERCC
shall submit
an account to
the State
Government
and certify
that the
the mining lease holders.
Explanation.—"Mining
lease holder" means a
person who has been
granted mining lease,
quarry lease or license or
other mineral concession
under the Mines and
Minerals (Development
and Regulation) Act,
1957 (67 of 1957), the
rules made thereunder or
the rules made by a State
Government under
\subsection (1) of section
15 of the Mines and
Minerals (Development
and Regulation) Act,
1957.
amount of
goods and
services tax
deposited by
mining lease
holders on
royalty is
more than the
goods and
services tax
exempted on
the service
provided by
State
Government
to the ERCC
of assignment
of right to
collect royalty
and where
such amount
of goods and
services tax
paid by
mining lease
holders is less
than the
amount of
goods and
services tax
exempted, the
exemption
shall be
restricted to
such amount
as is equal to
the amount of
goods and
services tax
paid by the
mining lease
holders and
the ERCC
shall pay the
difference
between goods
and services
tax exempted
on the service
provided by
State
Government
to the ERCC
of assignment
of right to
collect royalty
and goods and
services tax
paid by the
mining lease
holders on
royalty.]
72 Heading
9992
Services provided to the
Central Government,
State Government, Union
territory administration
under any training
programme for which
total expenditure is
borne by the Central
Government, State
Government, Union
territory administration.
Nil Nil
1. "vessel" has the same meaning as assigned to it in clause (z) of section 2 of the
Major Port Trusts Act, 1963 (38 of 1963);
2. "aircraft" has the same meaning as assigned to it in clause (1) of section 2 of the
Aircraft Act, 1934 (22 of 1934);
3."airport" has the same meaning as assigned to it in clause (b) of section 2 of the
Airports Authority of India Act, 1994 (55 of 1994); (h) "approved vocational education
course" means,—
(i) a course run by an industrial training institute or an industrial training
centre affiliated to the National Council for Vocational Training or State
Council for Vocational Training offering courses in designated trades
notified under the Apprentices Act, 1961 (52 of 1961); or
(ii) a Modular Employable Skill Course, approved by the National Council
of Vocational Training, run by a person registered with the Directorate
General of Training, Ministry of Skill Development and
Entrepreneurship;
4."banking company" has the same meaning as assigned to it in clause (a) of section
45A of the Reserve Bank of India Act, 1934 (2 of 1934);
5."financial institution" has the same meaning as assigned to it in clause (c) of section
45-I of the Reserve Bank of India Act, 1934 (2 of 1934).]
6."Governmental Authority" means an authority or a board or any other body, -
(i) set up by an Act of Parliament or a State Legislature; or
(ii) established by any Government,
with 90 per cent or more participation by way of equity or control, to carry out any
function entrusted to a Municipality under article 243W of the Constitution or to a
Panchayat under article 243G of the Constitution;
7."Government Entity" means an authority or a board or any other body including a
society, trust, corporation,
(i) set up by an Act of Parliament or State Legislature; or
(ii) established by any Government,
with 90 per cent or more participation by way of equity or control, to carry out a
function entrusted by the Central Government, State Government, Union Territory or
For GST Related Queries-Contact CA RajenderArora +91-9891112120, carajenderarora@gmail.com
a local authority;]
8. "interest" means interest payable in any manner in respect of any moneys borrowed
or debt incurred (including a deposit, claim or other similar right or obligation) but
does not include any service fee or other charge in respect of the moneys borrowed or
debt incurred or in respect of any credit facility which has not been utilised;
9. "port" has the same meaning as assigned to it in clause (q) of section 2 of the Major
Port Trusts Act, 1963 (38 of 1963) or in clause (4) of section 3 of the Indian Ports Act,
1908 (15 of 1908);
10. "renting in relation to immovable property" means allowing, permitting or granting
access, entry, occupation, use or any such facility, wholly or partly, in an immovable
property, with or without the transfer of possession or control of the said immovable
property and includes letting, leasing, licensing or other similar arrangements in
respect of immovable property;
11. special category States" shall mean the States as specified in sub-clause (g) of
clause (4) of article 279A of the Constitution
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