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The finance ministry and empowered committee of state finance ministers have released a usual exempted items list including tea, coffee, biscuits and other medicines that have been exempted from excise duty. Talking about the exempted items list, excise duty exemption list has around 300 items, which will be detracted to the VAT list of close to 90 items.
The Centre gives excise rebate to processed food, physicky and a discounted rate to fruit-based items. The states exempt unprocessed goods including Fruit, vegetables, salt, grain and coarse fabric that are consumed by poor. Other items such as bread, milk, vegetables, cereals, books and salt are common in the Centre and State.
Under GST Exempt Supply is defined under Section 2(47) of CGST Act, 2017. Under Section 2(47) “Exempt Supply” means the supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply.
Read Also: List of Goods and Services Not Eligible for ITC (Input Tax Credit)
There were a lot of concerns over how exemptions will be treated in GST and what shall be the items to be included in the exempted list by various renowned persons. But after GST implementation initially vide Notification No. 2/2017- Central Tax (Rate) dated 28.06.2017 list of items were introduced which are exempted from GST. This list mainly includes vegetables, pulses, handicrafts, books, agriculture produce etc. The basic idea was to keep the daily essential items necessary for living to be kept out of the ambit of GST so as to avoid unnecessary burden on the pocket of common man.
“The government has made 376 changes to the tax system by issuing circulars and coming out with clarifications about change in rates or exemptions,” said Vinay Sharma, chairman, EPCES at an open house meeting with exporters to discuss issues related to GST.
Of these, 73 changes are related to the exemption and 65 with rates. The Government is continuously making changes by the issue of notification in public interest to provide the exemption for the growth of a business.
