Glossary · GST & Indirect Tax
Zero-Rated Supply
A supply taxed at effectively nil where the supplier can claim a refund of input tax credit, typically exports and supplies to SEZs.
A zero-rated supply is one on which the output tax is effectively nil but the supplier is not burdened by the taxes paid on inputs, because the related input tax credit can be claimed as a refund. Exports of goods and services and supplies to Special Economic Zones (or SEZ units for authorised operations) are treated as zero-rated and may be made with or without payment of tax under the prescribed procedure.
Examples
A manufacturer exporting goods can treat the export as zero-rated and claim a refund of unutilised input tax credit.