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What are the goods and services that are exempt from GST?

Mohamed Rehan
08 January 2023, MVT 15:42
Mohamed Rehan
08 January 2023, MVT 15:42

The Maldives government has increased the rates of Goods and Services Tax (GST) effective from January 01, 2023.

Goods and Services Tax (GST), as prescribed in the Maldives Goods and Services Tax Act (Act No: 10/2011) are categorised into two different components: General Goods and Services Tax (GGST) and Tourism Goods and Services Tax (TGST).

General Goods and Services Tax (GGST) is levied on general services and regular consumers, while Tourism Goods and Services Tax (TGST) is exclusive to tourist properties and services. Previously the government levied a 6 percent GGST and a 12 percent TGST. Since January 01, GGST has increased to 8 percent and TGST to 16 percent.

Maldives Inland Revenue Authority (MIRA), the legally mandated body in collecting taxes for the state, has earlier published fact sheets providing local businesses and general consumers information on the impact of tax surges; and how it will be applicable depending on the business types.

Though most consumers and businesses are aware of how the tax hikes will reflect on the price tags of their purchases, there is still noticeable confusion surrounding the goods and services that are exempt from GST.


According to the new GST Regulation, services that are exempted from GST include electricity, water, sewerage, and postal services that are provided by the state.

The tax exempt postal services refers to postal services provided by the government and not other courier services.

Sewerage services authorised by EPA are also exempt from GST charges.

Education Service

Services provided by preschools, schools, vocational institutions, colleges, and universities run by the government are exempt from GST. This also applies to other educational institutions including tuition centres operated with the authorisation of the Ministry of Education.

Services supplied by canteens, bookshops, and businesses supplying services of benefit to students, within academic institutions and conducted without public access must render services without GST inclusion.

Health Service

Health services provided by hospitals, clinics, health centres, health posts, and other health facilities run by the government are exempted from GST. Health services provided by medical facilities with the authorisation of the Ministry of Health are exempted as well.

Health services such as pharmacies and other facilities supplying services of benefit for patients and also within the medical institutions without direct public access are exempted from GST on services.

Drugs and Medical Devices

Drugs and medical devices approved by the Maldives Food and Drug Authority and medical devices sold by pharmacies registered with the Ministry of Health are exempt from GST.

Medical devices used for the investigation, replacement, or modification of the anatomy or of a psychological process and devices used in controlling conception are exempted as well.

Financial Services

Services provided by a state institution or with the authorisation of the relevant state institution are exempt from GST. The services include the operation of accounts, currency exchange, bill of exchange, stock exchange, issuance of debt or shares, loans, financial advances, and credits.

The supply of domestic or international money transfer services and card services under a registered financial institutions are given exemption as well.

However, the section makes it clear that financial consultancy through registered bodies is not GST-exempt.

Rent from Immovable Property

Rent from immovable property refers to security deposits and advance rental payments or other similar payments received for immovable property, collected by the landlords from tenants. These payments are GST-exempt.

Additionally, payments received from the rented property not related to responsibilities under the lease agreement or for affixing anything in the property, or obtained from insurance policies and due to breaches in lease agreements are also exempt.

International Transportation Services

International transportation services that are exempt from GST include the transportation of passengers or goods from Maldives to international destinations and vice versa.

Additionally, as per the regulation fines are GST-exempt as well.

Fines required to be paid by suppliers of goods or services where recipients fail to make the payment for the goods or services by the due date are also GST-exempt.

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