Nil-rated, exempt and non-GST supplies
1 min read
Updated 03 Oct 2026
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AI summary
How to invoice, report and handle ITC for supplies with no GST.
4 sections
Definitions
| Type | Meaning | Examples |
|---|---|---|
| Nil-rated | 0% in the rate schedule | Some food grains (unbranded), fresh produce |
| Exempt | GST waived by notification | Fresh milk, healthcare, education, individual health/life insurance |
| Non-GST | Outside GST law | Petrol, diesel, ATF, crude oil, natural gas, alcohol for human consumption |
Invoicing
Issue a bill of supply (not a tax invoice) when only exempt or nil-rated items are sold. If a tax invoice has both taxable and exempt items, a single invoice-cum-bill of supply is allowed.
Reporting
- GSTR-1 Table 8: nil-rated, exempted and non-GST supplies, split inter-state/intra-state and registered/unregistered.
- GSTR-3B: Table 3.1(c) (nil and exempt) and 3.1(e) (non-GST).
ITC impact
ITC on inputs and services used only for exempt, nil-rated or non-GST supplies is not allowed. Where inputs are common, reverse the proportion under Rules 42 and 43.
Sources
PreviousDeemed exports and merchant-export supplies Next in GST Transactions Reverse charge transactions: accounting and reporting
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