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Regarding Exempt supply& nil rated supplies

deepak mishra (6 Points)

03 August 2018

what is the major difference between exempt supply & nil rate supply, non Gst supply

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2 Replies

Vinod Babu (24196 Points)
Replied 03 August 2018

Nil Rated Supplies:-

Goods or services on which GST rate of 0% is applicable (listed in Schedule 1 in the GST rate schedule) are called nil rated goods or services.

Supply of any of these goods or services is a nil rated supply under GST.

Non GST Supplies:-

Goods or services on which GST is not leviable (as these goods or services are kept out of the purview of GST) are called non-taxable goods or services.

Supply of any of these goods or services is a non-taxable supply under GST.

Exempt Supplies:-

By definition, exempt supply under GST is a broad term which includes nil rate supplies, non-taxable supplies and specific supplies which are notified as exempt from tax. Hence, in the GST Law and rules, reference to exempt supplies includes nil rate supplies, non-taxable supplies and the specific supplies declared as exempt by notification.

However, in GST returns the Department requires a bifurcation between nil rates, non-taxable and exempt supplies. Here, exempt supplies refer to supplies declared as exempt from tax by issue of a notification.

Zero Rated Supplies:-

Any goods or services supplied in the course of the following is a zero rated supply under GST:

a. Exports or

b. Supplies to Special Economic Zones (SEZ) or SEZ developers

Note that here, tax is not charged owing to the nature of supply, regardless of the goods or services supplied.