GST Exemption Checker

Understand whether a supply is taxable, nil-rated, exempt, or zero-rated — and what that means for ITC, reporting, and compliance.

Quick Classification Check
The Four Categories — Side by Side
Taxable Supply
GST rate
5%, 12%, 18%, or 28%
ITC on inputs
✓ Available
GSTR-1 reporting
Tables 4, 5, 6, 7
Example
Restaurant food, software, mobile phones
Nil-Rated Supply
GST rate
0% (in rate schedule)
ITC on inputs
✗ Not available — must reverse under Rule 42/43
GSTR-1 reporting
Table 8 (nil-rated)
Example
Rice, wheat, milk, fresh vegetables, books
Exempt Supply
GST rate
Not applicable — exempted by notification
ITC on inputs
✗ Not available — must reverse under Rule 42/43
GSTR-1 reporting
Table 8 (exempt)
Example
Healthcare, education, residential renting
Zero-Rated Supply
GST rate
0% but ITC claimable
ITC on inputs
✓ Available + refund eligible
GSTR-1 reporting
Tables 6A (export), 6B (SEZ)
Example
Export of goods/services, supplies to SEZ
Schedule III — Outside the Scope of GST Entirely

Neither goods nor services

Schedule III of CGST Act lists activities that are completely outside GST — no tax, no ITC reversal, not even reportable in GSTR-1.

  • Services by employee to employer in employment
  • Services by courts, tribunals
  • Functions of Members of Parliament, State Legislature
  • Services of funeral, burial, crematorium
  • Sale of land (not under construction)
  • Actionable claims (except lottery, betting, gambling)
  • Alcohol for human consumption (state excise only)

Why this matters for ITC

The ITC reversal obligation under Rule 42/43 applies to exempt supplies and nil-rated supplies — not to Schedule III activities.

A business that only makes Schedule III activities (e.g. sale of land) is not even required to register for GST — no GST return filing obligation exists.

However, if a business makes both taxable and Schedule III supplies, care must be taken to correctly identify and exclude Schedule III supplies from the ITC reversal calculation.

Frequently Asked Questions
Nil-rated supplies carry a 0% GST rate as specified in the rate schedules (e.g. rice, wheat, fresh vegetables). Exempt supplies are specifically excluded from GST by a government notification (e.g. healthcare, education). Both result in zero tax output. However, ITC on inputs used for both nil-rated and exempt supplies must be reversed under Rule 42/43 — this is the most practically significant consequence.
No. ITC on inputs, input services, and capital goods used exclusively for exempt supplies is not available under Section 17(2). For common inputs used for both taxable and exempt supplies, ITC must be reversed proportionately using the Rule 42 formula: ITC reversal = Total common ITC × (Exempt turnover / Total turnover).
Renting of residential property for use as residence is exempt from GST since July 2022 for all landlords — whether registered or not. However, renting of residential property to a registered person (for business use) attracts GST at 18% under Reverse Charge Mechanism (RCM) — the tenant must pay GST, not the landlord.
No. Export of services is zero-rated (not exempt) under Section 16 of IGST Act. Zero-rated means GST is not charged but the supplier can claim full ITC on inputs used and claim a refund. This is fundamentally different from exemption where ITC must be reversed. Exports must be reported in GSTR-1 Table 6B (if made under LUT) or Table 6A (with IGST payment).
Unprocessed agricultural produce (rice, wheat, pulses, fresh fruits, fresh vegetables, eggs, milk) is nil-rated. However, branded and packaged variants of the same products attract GST. For example, unbranded rice is nil-rated but packaged branded rice is taxable at 5%. Services relating to cultivation (renting of agri machinery, warehouse storage of agri produce) are generally exempt.