How to differentiate between nil rated supply and exempt supply?

On searching HSN or SAC, rate of tax is 0%. How to know if it is a nil rated supply or exempt supply?
Replies (4)
Quick Summary
Distinguishing between nil rated and exempt supplies can be tricky, especially when HSN or SAC codes show a 0% tax rate. The key lies in checking specific GST notifications. For goods, Notification No. 02/2017-Central Tax (Rate) and for services, Notification No. 12/2017-Central Tax (Rate) are crucial. If a supply falls under these notifications, it's considered exempt; otherwise, it's nil rated. HSN codes alone are not sufficient to make this distinction.

On searching HSN or SAC, rate of tax is 0%

1. For Goods, if it pertains to Notification No-  02/2017-Central Tax (Rate) dated 28.06.2017as amended

2. For Services, if it pertains to Notification No-  12/2017-Central Tax (Rate) dated 28.06.2017as amended

If above two conditions (1 or 2 ) are satisfied than it is EXEMPT supply

Otherwise it is NIL rate supply. 

You can easily differentiate between nill rated and exempt one. HSN CODE IS SEPERATE.
Originally posted by : sabyasachi mukherjee
You can easily differentiate between nill rated and exempt one. HSN CODE IS SEPERATE.

Please elaborate 

Please go through the link...
You can get some clarity about Nil Rated and Zero Rated...

https://www.indiafilings.com/learn/zero-rated-nil-exempted-and-non-gst-supply/


After that You can understand the difference...

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
30 September 2026
Senior Accountant

Codeboard Technology

Chennai

B.Com

View Details
Company
12 October 2026
Finance

I-Genext Consulting Private Limited

New Delhi

CA

View Details
Company
ARTICLESHIP 08 October 2026
ARTICLE TRAINEE

S.B.G. & CO. CHARTERED ACCOUNTANTS

New Delhi

CA Inter

View Details
Company
14 October 2026
Accountant

Rize.farm

Bengaluru

B.Com

View Details
Company
06 October 2026
Assistant Manager - Audit and Compliance

Ravi K Jain & Co

Noida

Others

View Details
Company
14 October 2026
Asst. Manager/Dy Manager (Costing)

manufacturing

Pune

CMA

View Details
Company
Featured 03 October 2026
Accountant

A P Lodha and Associates

Jalna

B.Com

View Details
Company
26 September 2026
Chartered Accountant

pushpganga ventures

Pune

CA

View Details