Difference between Nil Rated, Exempted, Zero Rated, and Non-GST supplies?

EZTax.in Product Master EZTax.in Product Master

Under current GST Act there are four (4) supply types, it’s very important to understand them and it’s Tax treatment to get proper ITC and GST Tax Compliance

  1. Exempted
  2. Nil Rated
  3. Zero Rated
  4. Non-GST
EZTax.in Product Master
EZTax.in Product Master

Let’s understand each one briefly.

1. Exempted

Exempt supply means supply of any goods or services or both which includes nil rate of tax or which may be wholly exempt from tax and includes non-taxable supply.

Thus it includes the supply of different types of goods and services:

  • Non-taxable supply;
  • Supply attracting nil rate of tax;
  • Supplies exempt under Section 11 of the GST Act excluding IGST and under Section 6 of the IGST Act;

2. Nil Rated

Goods or services on which GST rate of 0% is applicable (The GST rate schedule 1) are called Nil Rated Goods or Services.

Example: Grains, Salt, Jaggery etc.

3. Zero Rated

Zero rated supply means supply is taxable but rate of tax is zero. Therefore ITC is available on the goods or services or both.

Zero rated supplies includes

  • Export of goods or services or both to any other country outside India.
  • Supply of goods or services or both to SEZ / SEZ Developer.

4. Non-GST

It is the supply of goods or services or both that does not come under the purview of GST while other taxes maybe applicable.

Example: Alcohol, Petrol, etc.

With EZTax.in GST Accounting Online Software & Android App, choose whether a supply (Product / Service) is taxable or not, if not taxable, it will give you options to select whether the Supply is of Nil Rated, Exempted, Non GST. Rest of the treatment in invoicing and Returns such as GSTR-3B will be auto treated.

#ChooseWise #ChooseEZTax #GST #Accounting #GSTApp #EZTax


EZTax India for Accounting GST Income Tax, Service & Support
Accounting, GST, Income Tax, TDS
+91 7288 900 900
Chat | Call | eMail | WhatsApp | Download