Question: As we understand that any exempt supply is first taxable as tax is leviable on it and later it becomes exempt in case of exempted by the notification or by any means”. Now, my question is once it is exempt supply then whether it loses its characteristic of taxable supply and be counted as exempt supply only.
Now, if answer is negative then what are your thoughts on definition of turnover as defined in GST Act, where both the terms are separately to be included to calculate the turnover.
Answer: Every supply covered under section 9 is a taxable supply unless exempted. section 11 of CGST Act, 2017 provides that the Government may, on the recommendations of the council, “by notification, exempt generally, either absolutely or subject to such conditions as may be specified therein, goods or services or both of any specified description from the whole or any part of the tax leviable thereon”. Thus, while the supply was taxable, it has now been exempted and thus, it moves out of the space of being a taxable supply. Taxable supply is defined as “means a supply of goods or services or both which is leviable to tax under this Act.”
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