Criteria For Zero Rated Supply

[KASTURI SETHI]

Dear Experts,

Zero rated supply, NIL rated supply, Exempt supply, Non-taxable supply, NON-GST supply are altogether different terms.

NIL rate is also a rate of duty (Supreme Court). Zero rated is also rate of duty/tax.

Although export benefits may be available to exempt supply, non-taxable supply & Non-GST supply in different Acts, yetthese supplies cannot be categorized as ZERO rated inasmuch as these are already tax free.

Q.1 What is zero rated supply under GST?

Ans. Under GST, exports and supplies to SEZ are zero-rated as per Section 16 of the IGST Act, 2017. By zero-rating, it is meant that the entire supply chain of a particular supply is tax free, i.e., there is no burden of tax either on the input side or output side.

Views of experts please. Thanks a lot.

AI Summary

Experts Clarify Zero-Rated vs. Exempt GST Supplies: Section 16 of IGST Act, 2017 Discussed in Detail The discussion on a forum revolves around the distinctions between various GST supply categories, focusing on zero-rated supplies under the GST framework. Zero-rated supplies, specifically exports and supplies to Special Economic Zones (SEZ), are tax-free throughout the supply chain, as per Section 16 of the IGST Act, 2017. Experts debate the nuances, explaining that while zero-rated supplies allow input tax credit (ITC) refunds, exempt supplies do not. The conversation highlights the complexities in claiming ITC and the implications for suppliers, particularly in differentiating between exempt and zero-rated supplies. The discussion includes detailed interpretations of relevant GST provisions and their practical applications.