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difference between 0 rated and exempted

rajesh kumar agarwal (proprietor) (22 Points)

01 August 2018

pl clerify on subject matter

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Pranjali (intern) (2216 Points)
Replied 01 August 2018

For zero rated goods, you can claim a tax credit since the rate exists even if it is zero. This is generally done for necessities by the govt to lower their prices. For exempted goods, however, you can't take any tax credits. Look at it this way, for zero rated goods, you are paying tax @ 0%. On the other hand, for exempted you aren't taxed AT ALL .

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SHAILENDER SINGH (166 Points)
Replied 01 August 2018

Pranjali kya khoobh kh gayi very very gud answer

Nivesh tater (Tax Executive at Mazars India Bangalore) (205 Points)
Replied 01 August 2018

Zero rated is defined in IGST Act where any goods or services are exported out of India or supplied to SEZ

Whereas exempted goods are those which by virtue of section 11 of CGST Act are exempted from GST by order of the government.

Also regarding credits our professional colleague Ms. Pranjali has given suitable explanation.