In a GST regime, how and what type of goods and services would be subject to GST? All goods and services are subject to GST, unless specifically exempt. Companies providing exempt supply will not be able to recover as input tax of the GST incurred on purchases made.
The GST incurred will become part of the cost of doing business. It is anticipated that the number of exemptions under the present sales tax regime would be significantly reduced. Goods and services that are subject to GST can be taxed at standard rate, which is at a fixed rate of, for example 5% or 10%, and at zero rate. Zero rating is a concept only found under the GST framework. Suppliers of zero rated supplies do not collect GST because the GST rate is zero.
Nevertheless, because zero rated supplies are regarded as taxable supplies, the supplier would be able to recover as input tax of the GST incurred on purchases used in providing the zero rated supply. Export of goods is one of the zero rated supplies in many countries under the GST type regime. The following table gives a summary of the types of supply under a GST regime. | Taxable supply | Standard-rated supply | GST incurred on purchases is recoverable | | Zero-rated supply | | Non-taxable supply | Exempt supply | GST incurred on purchases is NOT recoverable |
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