The Central Goods and Services Tax Act, 2017
Schedule III
[See section 7]
Activities or Transactions which shall be treated neither as a supply of goods nor a supply of services
1. ServicesC1 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.
3. (a) the functions performed by the Members of Parliament, Members of State Legislature, Members of Panchayats, Members of Municipalities and Members of other local authorities;
(b) the duties performed by any person who holds any post in pursuance of the provisions of the Constitution in that capacity; or
(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 landC2 and, subject to clause (b) of paragraph 5 of Schedule II, sale of building.
6. Actionable claims, other than 1[specified actionable claims].
2[7. 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.]
2[8. (a) Supply of warehoused goods to any person before clearance for home consumption;
(b) 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.]
3[9. Activity of apportionment of co-insurance premium by the lead insurer to the co-insurer for the insurance services jointly supplied by the lead insurer and the co-insurer to the insured in co-insurance agreements, subject to the condition that the lead insurer pays the central tax, the State tax, the Union territory tax and the integrated tax on the entire amount of premium paid by the insured.]
3[10. Services by insurer to the reinsurer for which ceding commission or the reinsurance commission is deducted from reinsurance premium paid by the insurer to the reinsurer, subject to the condition that the central tax, the State tax, the Union territory tax and the integrated tax is paid by the reinsurer on the gross reinsurance premium payable by the insurer to the reinsurer, inclusive of the said ceding commission or the reinsurance commission.]
Explanation 4[1].—For the purposes of paragraph 2, the term “court” includes District Court, High Court and Supreme Court.
2[Explanation 2.–For the purposes of paragraph 8, the expression “warehoused goods” shall have the same meaning as assigned to it in the Customs Act, 1962.]
References
Enforcement:
Enforced w.e.f. July 01, 2017 [Notification No. G.S.R. 658(E) dated 28.06.2017].
Amendments:
1. Inserted by Central Goods and Services Tax (Amendment) Act, 2023, w.e.f. 01.10.2023 [vide Notification No. 48/2023– Central Tax dated 29.09.2023], for the words “lottery, betting and gambling”. [Note: As per Sec. 5 of the Central Goods and Services Tax (Amendment) Act, 2023, the amendments made under this Act shall be without prejudice to provisions of any other law for the time being in force, providing for prohibiting, restricting or regulating betting, casino, gambling, horse racing, lottery or online gaming.]
2. Inserted by Central Goods and Services Tax (Amendment) Act, 2018, w.e.f. 01.02.2019 [vide Notification No. 2/2019–Central Tax dated 29.01.2019]. [Retrospective effect, vide Section 159 Finance Act, 2023 w.e.f. 01.10.2023, Notification No. 28/2023–Central Tax dated 31.07.2023, as:
159. (1) In Schedule III to the Central Goods and Services Tax Act, paragraphs 7 and 8 and the Explanation 2 thereof (as inserted vide section 32 of Act 31 of 2018) shall be deemed to have been inserted therein with effect from the 1st day of July, 2017.
(2) No refund shall be made of all the tax which has been collected, but which would not have been so collected, had sub-section (1) been in force at all material times.]
3. Inserted by Finance (No. 2) Act, 2024, w.e.f. 01.11.2024 [Notification No. 17/2024–Central Tax dated 27.09.2024]. Also, refer Circular No. 244/01/2025-GST dated 28.01.2025.
4. Numbered as “Explanation 1” by Central Goods and Services Tax (Amendment) Act, 2018, w.e.f. 01.02.2019 [vide Notification No. 2/2019–Central Tax dated 29.01.2019].
Circulars:
C1. Director’s Remuneration: Remuneration paid to Independent Directors, or those directors, by whatever name called, who are not employees of the company, is taxable. The part of Director’s remuneration which are declared as ‘Salaries’ in the books of a company and subjected to TDS under Section 192 of the IT Act, are not taxable being consideration for services by an employee to the employer in the course of or in relation to his employment in terms of Schedule III of the CGST Act, 2017. The part of employee Director’s remuneration which is declared separately other than ‘salaries’ in the Company’s accounts and subjected to TDS under Section 194J of the IT Act as Fees for professional or Technical Services shall be treated as consideration for providing services which are outside the scope of Schedule III of the CGST Act, and is therefore, taxable.[Circular No. 140/10/2020-GST dated 10.06.2020].
C1. Any perquisites provided by the employer to its employees in terms of contractual agreement entered into between the employer and the employee are in lieu of the services provided by employee to the employer in relation to his employment. It follows therefrom that perquisites provided by the employer to the employee in terms of contractual agreement entered into between the employer and the employee, will not be subjected to GST when the same are provided in terms of the contract between the employer and employee.[Circular No. 172/04/2022-GST dated 06.07.2022].
C1. Clarification on the taxability of ESOP/ESPP/RSU provided by a company to its employees through its overseas holding company. [Circular No. 213/07/2024-GST dated 26.06.2024]
C2. Land may be sold either as it is or after some development such as levelling, laying down of drainage lines, water lines, electricity lines, etc. Sale of such developed land is also sale of land and is covered by Sr. No. 5 of Schedule III of the Central Goods and Services Tax Act, 2017 and accordingly does not attract GST. However, it may be noted that any service provided for development of land, like levelling, laying of drainage lines (as may be received by developers) shall attract GST at applicable rate for such services.[Circular No. 177/09/2022-TRU dated 03.08.2022]
C3. Clarification on various issues pertaining to GST treatment of vouchers.[Circular No. 243/37/2024-GST dated 31.12.2024]