Zero-Rated GST Refund

Under the Goods and Services Tax (GST) law, a zero-rated supply (primarily exports of goods or services) allows suppliers to claim a refund of the GST paid on inputs and input services used in making the supply. This ensures that exports remain effectively tax-free, maintaining the competitiveness of Indian goods and services in global markets. Key points: Refund can be claimed without payment of IGST by furnishing a Letter of Undertaking (LUT), or after paying IGST and then filing for a refund. The refund is limited to the GST paid on inputs, not on exempted or non-taxable supplies. The process involves filing the refund application through the GST portal with supporting invoices and documentation.

Example: A company exports software worth ₹10 lakh. During production, it paid ₹50,000 GST on inputs. The company can claim a refund of ₹50,000 GST from the government under the zero-rated supply provisions