EXEMPT SUPPLIES AND ZERO RATED SUPPLIES

Exempt supplier

            Doesn’t deal with taxable supplies (goods and services)

   Need not register for VAT and cannot claim a refund of any input tax on purchases

   He absorbs the input tax through pricing “vehicle”

Examples of exempt supplies

Agricultural goods e.g. fruits, tomatoes, potatoes, barley

Animal husbandry e.g. live sheep, goat, fish, turkey, pucks, carcasses etc.

Water,maize flour etc 
Zero rated supplies.
these are goods/services on which VAT is chargeable at  0% .Where a taxable person supplies goods or services and the supply is zero rated there are two significant consequences:

• no tax is chargeable on the supply,but
• the supply will in all other respects be treated as a taxable supply

Accordingly, the rate at which tax is treated as charged on the supply will be nil, in contrast to the standard rate of 16% or the lower rate of 12%.