Provisions under Section 16 of the Integrated Goods and Services Tax (IGST) Act, 2017 relating to “Zero Rated Supply”, are as under:
Section 16 of IGST Act 2017: Zero Rated Supply (CHAPTER VII – ZERO RATED SUPPLY)
(1) “zero rated supply” means any of the following supplies of goods or services or both, namely:–
(a) export of goods or services or both; or
(b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit.
(2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply.
(3) A registered person making zero rated supply shall be eligible to claim refund under either of the following options, namely:–
(a) he may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilised input tax credit; or
(b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied,
in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder.
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Govt. has notified the Integrated Goods and Services Tax (IGST) Act, 2017 on 12 April, 2017 followed with various CBIC Notifications on commencement date for various Sections/ Provisions thereof from time to time. Govt. has further notified the Integrated Goods and Services Tax (IGST) (Amendment) Act, 2018 on 30 Aug. 2018 followed with CBIC Notification on commencement date of various Sections/ Provisions thereof from 1 Feb. 2019 vide Notification No. 1/2019 Integrated Tax dt. 29 Jan. 2019 except for amendments where the date of commencement is different from 1 Feb. 2019 and has specifically been mentioned in the IGST Amendment Act, 2018 itself.
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| CGST Act/ Definitions | CGST Rules |
| IGST Act/ Definitions | IGST Rules |
| UTGST Act/ Definitions | UTGST Rules |
Does the GST exemption for SEZ units applicable for all products which are sold to them or only those which are used by them for manufacturing and exports? To be specific we deal in hot beverages and snacks and we sell such items to SEZ units which are used by their employee’s.
At the time of export of goods, shipping bill filed with 5% IGST and procured the goods locally with CGST 2.5% and 2.5% SGST. At the time of filing GSTR-3B, IGST liability adjusted against the input of local purchases. Whether the input claim tantamounts to payment under section 16 or not? to claim refund from the department.