Gst query for rice dealer

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This discussion clarifies the Goods and Services Tax (GST) status of rice. While often used interchangeably, 'exempt' and 'nil-rated' have distinct meanings in GST law. Exempt supplies are those that might otherwise attract tax but are relieved by an exemption notification, whereas nil-rated supplies have a GST tariff rate of 0% from the outset. The content highlights that rice falls under exempt supplies as per Notification No. 2/2017-Central Tax (Rate), not nil-rated.

Kollipara Sundaraiah

Kollipara Sundaraiah (Querist)
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20 April 2021 Whether Rice goods is exempted or nil rate goods. what is the difference between two .

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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20 April 2021 Rice is exempted and nil rated. Both are one and the same.

CA. Bhavik P. Chudasama

CA. Bhavik P. Chudasama (Expert)
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20 April 2021 With All due respect to Expert , I would like to add something more to the Answer

Exempt Supply means supply of any goods or services or both which attracts nil rated of tax or which may be wholly exempt under section 11, or under section 6 of the Integrated Goods and Services Tax Act, and includes Non- Taxable supply.

Nil rated supply is nowhere defined in GST Law. The basic difference between nil rated and exempt supply is that the goods/services have GST Rate higher than 0% in case of exempt supply. But there is no tax on such goods/services due to exemption notification.

Whereas in case of NIL rated supply, the tariff is at NIL rate so there is no tax without the exemption notification.

Notification No.1/2017-Central Tax (Rate) deals with CGST Rate for Goods & this Notification does not include any Goods with Tariff Rate as Zero

Notification No.2/2017-Central Tax (Rate) deals with CGST exempt goods notified under section 11 (1)

Hope your Query is Resolved and you have clear picture of the Exempted Goods & Nil Rated Goods

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