difference between exempted goods and non taxable goods under gst

This query is : Resolved 
 

(Querist)
16 June 2017

dear experts, what is the difference between exempted goods and non taxable goods?


SEETHARAMAN (Expert)

16 June 2017

For exempted goods no input tax credit can be taken.

GST zero-rated supply means that the goods and services that fall under this category are not taxed. In other words, they are subject to zero percent tax rate.
Under this category, the taxable company doesn’t need to collect any GST on sales. But the company is most certainly eligible to file a claim for input General and Sales Tax credit on the cost incurred in manufacturing the supplies. Simply stated, GST that is paid on asset, operational cost incurred and purchases for manufacturing goods are claimable as ITC (Input Tax Credit).
In India export of goods and services are zero rated.

NANDAN.C.G (Querist)
16 June 2017

nontaxable supply means zero rated supply? if dealer making zero rated supply then he is not eligible to opt for a composition ?

SEETHARAMAN (Expert)

16 June 2017

Yes nontaxable supply means zero rated supply. If dealer making zero rated supply then he is not eligible to opt for a composition.


NANDAN.C.G (Querist)
16 June 2017

if composition dealer taxable goods purchased from the unregistered dealer he should pay tax on that good?

SEETHARAMAN (Expert)

17 June 2017

Not required to pay as he can't claim ITC on it.

NANDAN.C.G (Querist)
17 June 2017

in the case of arecanut business if regular dealer purchase areca from unregistered dealer he will pay for areca Rs.50000+gst 5%+his profit 2%= 53500 if composition dealer purchase from unregister dealer for areca Rs.50000+gst 1%+profit 2%= 51500 as per my opinion composition dealer also payable tax on URD.

SEETHARAMAN (Expert)

17 June 2017

If you consider ITC of 5%, Rs.50000+gst 5%+his profit 2%= 53500-2500(ITC)=51500.
You have to change your opinion.


NANDAN.C.G (Querist)
17 June 2017

but for consumer's it will be more costlier then composition dealer.

SEETHARAMAN (Expert)

17 June 2017

The difference is very meager.



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