VG STUDY HUB CA VIVEK GABA 1 For classes: 9310888176, 7703880232, 882490148

Difference Between Nil Rated, Zero Rated, Exempted & Non-Taxable Supply
Particular Nil Rated
Meaning Supply of goods and/or services Any supplies of goods or
(or both) which attract 0%
GST rate is known as nil-rated
supply (Listed in Schedule I in
the GST Rate Schedule)
Availability of There is no tax credit input
ITC available for nil-rated supplies
Zero Rated Exempted Non-Taxable
Supply of goods and The supply of goods
services (or both) meant services that attract no and/or services that are
for Export or Special tax rate or are not included under the
Economic Zone (SEZ) specifically exempted GST Act is known as
Developer or Special from the GST Act due non-taxable supply.
Economic Zone (SEZ) to government These goods and/or
Unit comes under Zero- notification and include services may be charged
rated supply. The zero- non-taxable supply are under the local sales tax
rated supplies tax makes called exempted supply. or any other Act.
Indian goods and services In other words, it is the
available in international supply of goods and/or
markets at a competitive services which do not
price, thus ensuring no attract GST.
additional taxes are
included in the cost of
exports
ITC can be claimed in With respect to input The goods and/or
zero-rated supply. and/or input services services under non-
VG STUDY HUB CA VIVEK GABA
for inputs and/or input services
provided by nil-rated supply. In
simpler terms, GST credit is
not available to the registered
dealer.
GST GST on nil-rated supplies is
Applicability not applicable, therefore
cannot be claimed.
2 For classes: 9310888176, 7703880232, 882490148
that are used for taxable supplies do not
making availability of have any tax input
exempt supplies, no credit, and hence it
input credit can be can’t be claimed.
claimed.
There are two ways that For goods and services GST for goods and/or
GST is applicable in zero- under exempted supply, services under non-
rated supplies; GST is not applicable. taxable supply is not
(i)The use of LOU applicable.
(Letter of undertaking)
and claiming a refund of
unutilised GST for goods
and services without any
payment of GST.
(ii) Paying IGST for
supply of goods and
services and then
claiming a refund for the
IGST paid on the
supplies.
VG STUDY HUB CA VIVEK GABA 3 For classes: 9310888176, 7703880232, 882490148

Examples Salt, jaggery, grains , Sanitary Exempted supply include Alcohol for human
Napkins, Kajal (other than puja samagri, Fresh consumption and
kajal pencil sticks) are some milk, Fresh fruits, Curd, petroleum products are
examples of goods included in Bread etc. the only goods included
the nil-rated supply under non-taxable
supply.