ZERO RATED SUPPLIES

ZERO RATED SUPPLIES

Subject: Science & tech

Context: Several states have called for removing taxation on Covid-related medicines and supplies, including a GST exemption on vaccines. In response, Finance Minister Nirmala Sitharaman has said that exemptions on domestic supplies and commercial imports “would make these items costlier” for consumers.

Concept:

• Zero rated supplies mean supply of goods or services or both to SEZ or SEZ developer or Export of goods or services or both.
• GST is not applicable in India for exports. Hence, all export supplies of a taxpayer registered under GST would be classified as zero rated supply.
• The tax payer can claim the input tax credit or claim the refund of unutilized input tax credit.
• zero rated supply means any of the following supplies of goods or services.
• Export of goods or services or both;
• Supply of goods or services or both to a Special Economic Zone developer
• Supply of goods or services or both to a Special Economic Zone unit.