Taxable supply

'Nil rate' can be for two reasons:

1. because the statute itself provides for nil rate of tax on supply

2. because the statute provides for some rate of tax but the rate is reduced to 'nil' through exemption notification.

The legislature may increase the rate from 'nil' to any higher rate as deemed fit by amendment. Similarly, the exemtption may be withdrawn to revive the rate of tax as originally provided in the statute.

Both are exempt supplies as per law.