As per section 2(47) of cgst act“exempt 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, or under section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply.
Exempt supplies comprise the following 3 types of supplies:
(a) Supplies taxable at a ‘NIL’ rate of tax;
(b) Supplies that are wholly or partially exempted from CGST or IGST, by way of a
(c) Non-taxable supplies as defined under Section 2(78) – supplies that are not taxable
under the Act (viz. alcoholic liquor for human consumption).
The following aspects need to be noted:
Zero-rated supplies such as exports would not be treated as supplies taxable at ‘NIL’
rate of tax;
Input tax credit attributable to exempt supplies will not be available for utilisation/ setoff.