Zero-Rated Supply (GST)

Zero-Rated Supply (GST) – A zero-rated supply under the Goods and Services Tax (GST) refers to the supply of goods or services that are taxed at 0%, but where the supplier is eligible to claim input tax credit (ITC) on inputs and input services used to make such supplies. This ensures that exports remain tax-free while allowing exporters to recover taxes paid on inputs, maintaining competitiveness in global trade. Export of goods or services, and Suppliers can either export goods/services without payment of IGST under a Letter of Undertaking (LUT) and claim refund of unutilized ITC, or export on payment of IGST and claim refund of the tax paid.

Example: It charges GST @0% on the export but can claim refund of ITC on input services like internet and software tools used for the project