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What is the difference between exempted sales &...

What is the difference between exempted sales & zero rated sales??

What is the difference between exempted sales & zero rated sales??

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Chiranjibi Aug. 29, 2018

Zero Rated Sale/Supply

Under zero rated supply, the output supplies as well as the inputs or input services used in supplying the supplies would be free from GST. Following are the important points under zero rated supply:

  • The taxes paid on the supplies which are zero rated are refunded;
  • The credit of inputs and input services are allowed;
  • Wherever the supplies are exempted, or the supplies are made without payment of tax, the taxes paid on the inputs and / or input services will be refunded (i.e. unutilized input tax credit would be refunded).


Exempted Sale/Supply

Exempted supply means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11 of CGST Act or under section 6 of the IGST Act, and includes non-taxable supply.

Following points are to be noted for exempted supply:

  • There is no GST applicable on outward exempted supplies;
  • Input tax credit of inputs and / or input services used in providing exempted supply is not available i.e. no input tax credit on exempted supplies;
  • A registered person supplying exempted goods or services or both shall issue ‘bill of supply’ instead of tax invoice.


What is the difference between exempted sales & zero rated sales??

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