Zero Rated Supply
FAQs – Zero Rated Supply (Section 16)
Q 1. What is the meaning of the term “Zero Rated Supply”?
Ans. “Zero Rated Supply” refers to supplies made TO SEZ units / developers or exports of goods or services or both. Zero rated supply doesn’t necessarily mean that the above supplies are not leviable to IGST or will taxed at “0” (Zero) Rate or will be exempt from IGST unconditionally.
Q 2. What is the relevance of zero rated supplies?
Ans. Given that the Exports and SEZ play a pivotal role in the economic growth in India, the registered person will have two options, namely;
(a) he can make Zero Rated Supplies without payment of IGST under Letter of Undertaking or Bond and claim refund of input tax credit w.r.t to such supplies; or
(b) he can make Zero Rated Supplies with payment of IGST (either by utilizing Input tax credit or by cash) and claim refund of such tax paid. However, the registered person will have to abide by the conditions, safeguards and procedures as may be prescribed.
Q 3. Are exports and supplies to SEZ units/Developers out of the ambit of GST?
Ans. No. They are leviable under IGST Act, 2017. However, the tax burden on the same will be neutralized by granting refunds to persons making such supplies subject to such safeguards, conditions and procedures as may be prescribed.
Q 4. Can SEZ unit / Developers claim refund of IGST charged by his supplier?
Ans. No. The IGST Act, 2017 allows the supplier of SEZ unit / developer to claim refund of IGST paid by him on supplies to SEZ unit / Developers.
Q 5. Are supplies made by SEZ units/Developer are Zero rated supplies?
Ans. No. only the supplies made TO SEZ units/Developer are zero rates supplies. However, Exports made BY SEZ units/Developer will be zero rated supplies.
MCQs – Zero Rated Supply (Section 16)
Q 1. Zero rated supply includes
(a) export of goods and services.
(b) Supply of goods and services to a SEZ developer or SEZ Unit
(c) Supply of goods and services by a SEZ developer or SEZ Unit
(d) Both (a) and (b)
Q 2. Is the SEZ developer or SEZ unit receiving zero rated supply eligible to claim refund of IGST paid by the registered taxable person on such supply?
(c) Partially yes
Ans. (b) No
Q 3. A registered taxable person is eligible to claim refund in respect of export of goods and services in the following cases:
(a) Under bond, without payment of IGST and claim refund of unutilized input tax credit.
(b) On payment of IGST and claim refund of IGST paid on such goods and services.
(c) None of the above
(d) Both (a) and (b)
Ans. (d) Both (a) and (b)
Q 4. The supply of goods to SEZ unit is treated as ___________ in the hands of the supplier:
(a) Exempt Supply – Reversal of credit
(b) Deemed Taxable Supply – No reversal of credit
(c) Export of Supplies
(d) Non Taxable Supply – Outside the Scope of GST
Ans. (b) Deemed Taxable Supply – No reversal of credit
Visit our partner website also wealthmaxi. Which is about mutual funds to view this site go to given below link
To view all GST Updates Click on given link below