Zero-Rated Supply Under GST

A GST-registered taxpayer’s export supplies are classified as zero-rated supplies. GST refunds are available for zero-rated supplies. Taxpayers must list all zero-rated supplies on their GSTR 3B and GSTR 1 filings.


This is Zero Rated Supply Under GST

There is no GST on exports in India. As a result, all export supplies made by a taxpayer who has registered for GST are zero-rated. According to Section 16 of the IGST Act, any of the following products or services are zero-rated supplies:

  • Exports include commodities, services, and a combination of the two.
  • Providing products or services to a developer of a Special Economic Zone
  • Providing a Special Economic Zone unit with products or services, or both.

GST Refund for Zero Rated Supply

Because exports are classified as zero-rated goods, even if they are branded as non-taxable or even exempt, the provider may claim an input tax credit for items or services utilized in the supplies, as per GST regulations.

By exporting under bond or LUT, or by exporting after paying IGST and demanding a refund, the taxpayer may get a GST refund.

Details to be Furnished in GST Returns

On their GSTR 3B and GSTR-1 reports, all taxpayers must record all zero-rated supplies. All export supplies must be specified in row B of the GSTR 3B return, as stated in the table below.

In the areas of exports, supplies to a SEZ unit or SEZ Developer, and anticipated exports, details of all export supplies must be included in the GSTR-1 report…

Zero Rated Supply Under GST

Zero Rated vs Exempt Supply

Examples of zero-rated items include exports and supplies to SEZ units or developers. On the other side, nontaxable or exempt supplies are those that are not subject to GST.

Any provision of goods or services, or both, that is tax-free or partially tax-free under section 11 of the CGST Act or section 6 of the IGST Act falls within the category of exempt supplies, which also includes non-taxable supplies.

This is how the exempt supply is described:

  • GST is not charged on supplies made outside of Canada.
  • For inputs and/or input services used in providing exempted supplies, there is no input tax credit available, i.e. no input tax credit on exempted supplies.
  • registered person delivering exempted products or services, or both, must provide a ‘bill of supply instead of a tax invoice.