List of Activities excluded from GST in India-Schedule-III of CGST Act 2017

There are certain activities or transactions which are not liable for GST in India. These transactions are kept out of purview of GST. Schedule-III  to CGST Act 2017 or State/UT GST Acts 2017 contains such Activities or transactions which shall be treated neither as a supply of goods nor a supply of services.

These activities are listed below:-

1. Services by an employee to the employer in the course of or in relation to his employment.

2. Services by any court or Tribunal established under any law for the time being in force.

Explanation:- For the purposes of paragraph 2, the term “court” includes District Court, High Court and Supreme Court.

3. (a) The functions performed by :-

• Members of Parliament,
• Members of State Legislature,
• Members of Panchayats,
• Members of Municipalities and
• Members of other local authorities;

3. (b) The duties performed by any person who holds any post in pursuance of the provisions of the Constitution in that capacity; or

3. (c) The duties performed by any person as a Chairperson or a Member or a Director in a body established by the Central Government or a State Government or local authority and who is not deemed as an employee before the commencement of this clause.

4. Services of funeral, burial, crematorium or mortuary including transportation of the deceased.

5. Sale of land and sale of building where entire consideration has been received after issuance of completion certificate from a competent authority (where such certificate required) or after its first occupation, whichever is earlier

6. Actionable claims, other than lottery, betting and gambling.

[As per Section 3 of the Transfer of Property Act, 1882:

Actionable Claim is a claim to any debt, (other than a debt secured by mortgage of immovable property or by hypothecation or pledge of movable property,) or to any beneficial interest in movable property not in possession either actual or constructive, of the claimant, which the civil courts recognize as affording grounds of relief whether such debt or beneficial interest be existent, accruing or conditional or contingent.]

Following clauses inserted by CGST Amendment Act 2018, applicable w.e.f. 01.02.2019

7. Merchanting Trade Transactions :- Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India.

8. (a) Supply of warehoused goods to any person before clearance for home consumption; {The expression “warehoused goods” shall have the same meaning as assigned to it in the Customs Act, 1962.}

8. (b) High Sea Sales : – Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption. 

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ACTIVITIES OR TRANSACTIONS EXCLUDED THROUGH NOTIFICATIONS

Other than Schedule-III, some activities are notified through various notifications which shall be treated neither as a supply of goods nor a supply of service. These activities are given below:-

• “Services by way of any activity in relation to a function entrusted to a Panchayat under article 243G of the Constitution” undertaken by the Central Government or State Government or Union territory or any local authority in which they are engaged as public authority. {Refer CGST-R-14-2017 dated 28/06/2017 w.e.f. 01/07/2017}

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• “Services by way of any activity in relation to a function entrusted to a Municipality under article 243W of the Constitution” undertaken by the Central Government or State Government or Union territory or any local authority in which they are engaged as public authority. {Refer CGST-R-16/2018 dated 26/07/2018 w.e.f. 27/07/2018}

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• “Service by way of grant of alcoholic liquor licence, against consideration in the form of licence fee or application fee or by whatever name it is called” undertaken by the State Governments in which they are engaged as public authorities. {Refer CGST-R-25/2019 dated 30/09/2019}

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