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Microlesson · 5-min read

Supply Leviable to GST – Taxable Person and Taxable Supply

# Supply Leviable to GST

For a supply to attract GST, two additional conditions must be satisfied beyond the basic definition of supply:

1. The supply must be made by a taxable person.

2. The supply must be a taxable supply.

## Taxable Person

A taxable person is a person who is:

  • Registered under GST, OR
  • Liable to be registered under Section 22 (threshold-based) or Section 24 (compulsory).

## Taxable Supply [Section 2(108)]

Any supply of goods/services/both that is leviable to tax under the GST law.

## Exempt Supply [Section 2(47)]

Means supply of any goods/services/both which:

  • Attracts nil rate of tax, OR
  • Is wholly exempt from tax under Section 11 of CGST Act or Section 6 of IGST Act, AND
  • Includes non-taxable supply.

## Quick Comparison

TermMeaning
Taxable SupplyLeviable to tax under GST (Sec 2(108))
Exempt SupplyNil-rated + wholly exempt + non-taxable supply (Sec 2(47))
Non-taxable SupplySupply of goods/services not leviable to GST (e.g., petrol, diesel, alcoholic liquor)
Nil-Rated SupplySupply taxable at 0% rate
Zero-Rated SupplyExports / supplies to SEZ – with ITC benefit

Worked example

### Example 1

Example: Mr. X (unregistered, turnover ₹15 lakh, intra-state) supplies stationery. He is below the threshold (₹40 lakh for goods in most states) and not under Sec 24 → NOT a taxable person → his supply does NOT attract GST.

### Example 2

Example: ABC Ltd (registered) supplies fresh milk (exempt). The supply is by a taxable person but is NOT a taxable supply → no GST.

⚠️ Common exam mistakes

  • Conflating 'exempt supply' with 'nil-rated supply' – exempt is broader and includes non-taxable supplies.
  • Treating a registered person's exempt supply as taxable just because the person is registered.
Bare-Act text Sections 2(108) and 2(47) · CGST Act, 2017 · click to expand
Section 2(108): 'taxable supply' means a supply of goods or services or both which is leviable to tax under this Act. Section 2(47): '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 IGST Act, and includes non-taxable supply.
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