Friends, In Gst there are three words Exempt , Nil Rate or Zero Rate which needs clarity while making GST accounting or filing GST Returns etc. I want to share in few words regarding difference between Exempt, Nil Rate or Zero Rate.
To know the above difference , everyone should know two other words like ITC or Output Tax Liability.. ITC (Input Tax Credit) is used for Taxable Purchases and Output Tax Liability is used for GST on Sales.
1) Exempt :- GST Rates exempted through GST Notification.
2) Nil Rate :- ITC will be Nil and Output Tax Liability will be Nil.
3) Zero Rate :- ITC will be available but Output Tax Liability will be Zero. Means Sale of Taxable product in SEZ unit or Export etc.