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Microlesson · 5-min read

Other Exempt Services

# Other Exempt Services (Residual Exemptions)

A mixed bag of frequently-tested residual exemptions. Watch out for the conditional exemptions with monetary caps in items (10), (12), (13).

## The list

#ServiceNotes
1Transfer of business as a going concern
2Satellite launch services
3Services by foreign diplomatic mission in IndiaServices provided to a foreign diplomatic mission are NOT exempt
4Transmission/distribution of electricity by transmission/distribution utilities to consumers — including releasing connection, rental, shifting/testing of meter, charges for duplicate bills
5News collection/providing by independent journalist, PTI, UNI
6Public libraries
7Services by an organiser for an exhibition held outside India
8Information under RTI Act, 2005
9Public convenience — bathrooms, washrooms, lavatories, urinals, toilets
10Incubatee services — exempt up to ₹50 lakh turnover in the FY, provided preceding-FY turnover ≤ ₹50 lakh AND less than 3 years have elapsed since the incubation agreement
11Taxable supplies by TBI/STEP or bio-incubators

Incubatee = entrepreneur in the premises of a Technology Business Incubator (TBI) or Science and Technology Entrepreneurship Park (STEP).

## (12) Services by unincorporated body or registered NPO to its own members

Way of reimbursement of charge or share of contribution:

  • As a trade union
  • For carrying out any GST-exempt activity
  • Up to ₹7,500 per month per flat in a housing society / residential complex for sourcing goods/services for common use of members.

If the ₹7,500 limit is breached — the entire amount is taxable (not just the excess).

Amount collected purely as reimbursement of statutory dues (property tax, water tax, electricity charges, etc.) is excluded from this ₹7,500 limit.

## (13) Services by unincorporated body or registered NPO under any law

Engaged in:

  • Welfare of industrial/agricultural labour or farmer
  • Promotion of trade, commerce, industry, agriculture, art, science, culture, sport, etc.

Against membership fees up to ₹1,000 per member per year — Exempt.

## Key takeaway

> Supply of all goods and services is taxable unless covered by an exemption or by Schedule III. Any service not listed in this chapter or in Schedule III is taxable.

Worked example

### Example 1

Q. A Residents Welfare Association collects ₹8,000 per month per flat as maintenance from each owner. Of this, ₹1,000 is property tax reimbursed and ₹500 is water tax reimbursed. Is the ₹7,500 exemption available?

A. Property tax (₹1,000) and water tax (₹500) reimbursements are excluded from the ₹7,500 limit. The relevant comparison amount is ₹8,000 − ₹1,500 = ₹6,500, which is within ₹7,500 → fully exempt.

### Example 2

Q. A trade association collects membership fees of ₹1,200 per member per year. Exempt?

A. Taxable on the entire ₹1,200. The ₹1,000 cap per member per year is a hard limit — breach it and the entire fee becomes taxable; it is not a deduction-style threshold.

⚠️ Common exam mistakes

  • Treating ₹7,500 (housing society) and ₹1,000 (NPO membership) as deduction-style thresholds — they are full-amount taxability triggers if breached.
  • Including property tax / water tax / electricity reimbursements in the ₹7,500 limit — these statutory pass-throughs must be excluded.
  • Assuming services to a foreign diplomatic mission are exempt — only services by the mission are exempt.
  • Treating ordinary supply of electricity equipment as exempt — only services of transmission/distribution and listed incidental charges by transmission/distribution utilities are exempt.
  • Forgetting the dual condition for the incubatee exemption: preceding-FY turnover ≤ ₹50L AND under 3 years of incubation.
Reference: — Notification No. 12/2017-CT(R)
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