Glossary
Exempt Supply
Exempt Supply
Exempt Supply An exempt supply under GST is a supply of goods or services that attracts a nil rate of tax or is wholly exempt from tax. Importantly, businesses cannot claim Input Tax Credit on inputs used for exempt supplies.
Where it appears in practice
It matters when determining a business's aggregate turnover for GST registration (threshold is ₹20 Lakhs or ₹40 Lakhs [VERIFY]) and when calculating proportionate Input Tax Credit reversals.
A worked example
Fresh milk, unbranded flour, and certain agricultural products are exempt from GST. A dairy farmer selling fresh milk does not charge GST and cannot claim input credit on the cattle feed.
Related terms
- Zero-Rated Supply
- Non-GST Supply
- Input Tax Credit
Let the practice handle it
This term sits inside real compliance work — returns, filings, and deadlines. That work is one of the services the practice runs end to end.
GST Registration