Difference Between Nil Rated, Exempted and Zero Rated Supply

“exempt supply” means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply;

 

“zero rated supply” means any of the following supplies of goods or services or both, namely:––

(a) export of goods or services or both; or

(b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit.

Zero Rated Supplies are basically Exports or supplies to SEZ unit/Developer.

Nil rated Supplies are the supplies with 0% rate of tax i.e. GST.

Exempt Supplies is a wider Term which includes nil rated, Non taxable Supplies or otherwise exempted under GST. 

Zero rated supply
- Export
- Supply to SEZ

Nil Rated supply
- Taxable supply with Tax Rate = 0%

Exempt Supply
- Taxable supply with Tax Rate = 3% or 5% or 12% or 18% or 28% but no tax is payable due to Exemption Notification of Government

- Exempt supply also include Nil Rated supply


- Exempt supply also include Non Taxable supply ( Ex. Petrol)