Regarding about vat-exempt entities.

Is a sale of goods by a vat exempt entity to a vat registered entity subject to vat?
Is there a vat passed on to the vat registered entity? If so what is the treatment (input tax or cost/expensed) of the passed-on VAT?

Assume if the buyer is also a vat exempt entity? Is it still subject to vat? Is there a vat passed on? If so how is it treated?