Exempt Supply means goods and services sold by the companies are free from Goods and Services Tax (GST). Since GST is a tax for common man, everyday items used by the common man have been included in the list of exempted items. No GST will be charged on these goods & services for company and business, GST paid on the assets, purchases or expenses for their businesses. Supplies are taxable but do not attract GST and for which ITC cannot be claimed in case of Exempt Supplies.
Examples: Live Fish, Fresh Milk & fruits, unpacked food grains, fresh vegetables, Curd, Bread etc.
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.
|Particulars||NIL Rated Supplies||Non-Taxable Supplies||Exempt Supplies||Zero-Rated Supplies|
|Meaning||Goods and services on which 0% GST is applicable||Goods and services on which GST is not levied at all||Supplies which are exempt from payment of GST||Goods or services which are exported or supplied to SEZ|
|Input credit availability||Not available||Not available||Not available||Available|
|GST applicability||Falls within GST ambit||Doesn’t fall within GST ambit||Falls within GST ambit||Falls within GST ambit|
|Example||Hotel accommodation with tariff below Rs. 1,000||Supply of alcohol for human consumption||Inward supplies from unregistered dealers||Export of shoes to South Africa|