{"id":3737,"date":"2016-12-24T15:26:27","date_gmt":"2016-12-24T09:56:27","guid":{"rendered":"https:\/\/taxclick.org\/?p=3737"},"modified":"2016-12-24T15:27:19","modified_gmt":"2016-12-24T09:57:19","slug":"section-16-zero-rated-supply-igst-act","status":"publish","type":"post","link":"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/","title":{"rendered":"Section 16 Zero Rated Supply (IGST ACT)"},"content":{"rendered":"<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\">A new Chapter VIII has been introduced in the IGST Act wherein the concept of zero rated supply has been framed. The provisions contained in the section 16 are discussed as follows:-<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\">Zero rated supply means any of the following taxable supply of goods and\/or services, namely-<\/span><\/p>\n<ul style=\"text-align: justify;\">\n<li><span style=\"font-size: 12pt;\">Export of goods and\/or services; or<\/span><\/li>\n<li><span style=\"font-size: 12pt;\">Supply of goods and\/or services to a SEZ developer or an SEZ unit.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\">It is also provided that the credit of input tax may be availed for making zero rated supplies notwithstanding that such supply may be an exempt supply.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\">It is further provided that a registered taxable person exporting goods or services shall be eligible to claim refund under one of the following two options:-<\/span><\/p>\n<ul style=\"text-align: justify;\">\n<li><span style=\"font-size: 12pt;\">A registered taxable person may export goods or services under bond, subject to such conditions, safeguards and procedure as may be prescribed without payment of IGST and claim refund of unutilised input tax credit in accordance with provisions of section 48 of the CGST Act.<\/span><\/li>\n<li><span style=\"font-size: 12pt;\">A registered taxable person may export goods or services subject to such conditions, safeguards and procedure as may be prescribed with payment of IGST and claim refund of IGST paid on goods and services exported in accordance with provisions of section 48 of the CGST Act.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\">Lastly, it is provided that the SEZ developer or SEZ unit receiving zero rated supply shall be entitled to claim refund of IGST paid by registered taxable person on such supply.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\">On studying the above provisions, following implications may be drawn:-<\/span><\/p>\n<ul style=\"text-align: justify;\">\n<li><span style=\"font-size: 12pt;\">The meaning of zero rated supply is very restricted and limited to normal exports and supply to SEZ or SEZ developer. The supplies made to EOUs, EHTP, STP etc are not covered under the concept of zero rated supply.<\/span><\/li>\n<li><span style=\"font-size: 12pt;\">The input tax credit is available for zero rated supplies. This means that export without payment of duty and supply to SEZ will be considered as zero rated supply and credit will be available. Consequently, there will not be requirement to reverse credit even when the supplies are made without payment of duty in cases of exports and supply made to SEZ.<\/span><\/li>\n<li><span style=\"font-size: 12pt;\">As EOU are not covered under zero rated supplies, the refund of unutilised cenvat credit will not be admissible to the supplies made to EOU. It was concluded by various judicial pronouncements like <strong><em>NBM Industries<\/em><\/strong> Case wherein supply to EOU was treated at par with physical export and benefit of refund of accumulated credit was extended. However, there amendment was made vide Budget, 2015 wherein definition of export was given for the purpose of refund of accumulated cenvat credit which stated that export means taking out of India to a place outside India. Consequently, refund of accumulated credit is not admissible to EOU but is available for clearances made to SEZ because the provisions of SEZ Act have overriding effect and supplies to SEZ are to be considered as export. It appears that the present policy is carried forward in the GST regime too.<\/span><\/li>\n<li><span style=\"font-size: 12pt;\">It appears that the concept of \u2018deemed exports\u2019 will also be introduced in GST laws. This is evident from the definition of \u2018deemed exports\u2019 given under section 2(37) of the GST Act, 2016. It states that deemed exports as notified by the Central\/State Government on the recommendation of the Council, refer to those transactions in which the goods supplied do not leave India and payment for such supplies is received either in Indian rupees or in convertible foreign exchange. At present, as per DGFT Laws, supplies to EOU is considered as deemed export and it may be possible that it is specified as deemed exports in GST Law also if the same is recommended by the Council. It is also pertinent to mention that refund under section 48 of the GST Act, 2016 includes refund of tax on supply of goods regarded as deemed exports. Consequently, it may be possible that supplies to EOU are made on payment of tax but refund of the said tax is admissible to the supplier. This is departure from the present provision under Central Excise Laws wherein clearances to EOU are made without payment of excise duty. We can say that exemption for supplies to EOU will be through refund mechanism. Similarly, for SEZ, exemption by way of refund mechanism has been prescribed in GST regime.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\">You may visit us at\u00a0 <a href=\"http:\/\/www.capradeepjain.com\">www.capradeepjain.com<\/a><\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\"><a href=\"https:\/\/www.facebook.com\/GSTTODAYBYPRADEEPJAIN\">https:\/\/www.facebook.com\/GSTTODAYBYPRADEEPJAIN<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A new Chapter VIII has been introduced in the IGST Act wherein the concept of zero rated supply has been framed. The provisions contained in the section 16 are discussed as follows:- Zero rated supply means any of the following taxable supply of goods and\/or services, namely- Export of goods and\/or services; or Supply of &#8230; <a title=\"Section 16 Zero Rated Supply (IGST ACT)\" class=\"read-more\" href=\"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/\" aria-label=\"More on Section 16 Zero Rated Supply (IGST ACT)\">Read more<\/a><\/p>\n","protected":false},"author":17,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[15],"tags":[217,425,455],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Section 16 Zero Rated Supply<\/title>\n<meta name=\"description\" content=\"A new Chapter VIII has been introduced in the IGST Act wherein the concept of zero rated supply has been framed. The provisions contained in the section 16 are discussed as follows\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Section 16 Zero Rated Supply\" \/>\n<meta property=\"og:description\" content=\"A new Chapter VIII has been introduced in the IGST Act wherein the concept of zero rated supply has been framed. The provisions contained in the section 16 are discussed as follows\" \/>\n<meta property=\"og:url\" content=\"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/\" \/>\n<meta property=\"og:site_name\" content=\"All About Finance\" \/>\n<meta property=\"article:published_time\" content=\"2016-12-24T09:56:27+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2016-12-24T09:57:19+00:00\" \/>\n<meta name=\"author\" content=\"Ca Pradeep Jain\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Ca Pradeep Jain\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/\"},\"author\":{\"name\":\"Ca Pradeep Jain\",\"@id\":\"https:\/\/taxclick.org\/#\/schema\/person\/5685f61d7533d550639d58aef7a6d4b5\"},\"headline\":\"Section 16 Zero Rated Supply (IGST ACT)\",\"datePublished\":\"2016-12-24T09:56:27+00:00\",\"dateModified\":\"2016-12-24T09:57:19+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/\"},\"wordCount\":736,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/taxclick.org\/#organization\"},\"keywords\":[\"GST\",\"GST Law\",\"Zero Rated Supply\"],\"articleSection\":[\"GST\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/\",\"url\":\"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/\",\"name\":\"Section 16 Zero Rated Supply\",\"isPartOf\":{\"@id\":\"https:\/\/taxclick.org\/#website\"},\"datePublished\":\"2016-12-24T09:56:27+00:00\",\"dateModified\":\"2016-12-24T09:57:19+00:00\",\"description\":\"A new Chapter VIII has been introduced in the IGST Act wherein the concept of zero rated supply has been framed. The provisions contained in the section 16 are discussed as follows\",\"breadcrumb\":{\"@id\":\"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/taxclick.org\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Section 16 Zero Rated Supply (IGST ACT)\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/taxclick.org\/#website\",\"url\":\"https:\/\/taxclick.org\/\",\"name\":\"All About Finance\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\/\/taxclick.org\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/taxclick.org\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/taxclick.org\/#organization\",\"name\":\"All About Finance\",\"url\":\"https:\/\/taxclick.org\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/taxclick.org\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/taxclick.org\/wp-content\/uploads\/2016\/01\/taxclick-logo.png\",\"contentUrl\":\"https:\/\/taxclick.org\/wp-content\/uploads\/2016\/01\/taxclick-logo.png\",\"width\":235,\"height\":68,\"caption\":\"All About Finance\"},\"image\":{\"@id\":\"https:\/\/taxclick.org\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/taxclick.org\/#\/schema\/person\/5685f61d7533d550639d58aef7a6d4b5\",\"name\":\"Ca Pradeep Jain\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/taxclick.org\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/a305539b3ea58f61ad29adce218ea6c9?s=96&d=ANSPRESS_AVATAR_SRC&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/a305539b3ea58f61ad29adce218ea6c9?s=96&d=ANSPRESS_AVATAR_SRC&r=g\",\"caption\":\"Ca Pradeep Jain\"},\"description\":\"Author is practicing Chartered Accountant, practicing in indirect taxation laws- Central Excise, Customs, Service Tax and DGFT since 1994; having head office at Jodhpur and Branch Office at Ahmedabad. He is prominent speaker in various seminars held on indirect taxation during budget. Addressed various seminars of ICAI chapter, has been faculty for residential courses held by ICAI. He can be reached at Pradeep@capradeepjain.com\",\"url\":\"https:\/\/taxclick.org\/author\/ca-pradeep-jain\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Section 16 Zero Rated Supply","description":"A new Chapter VIII has been introduced in the IGST Act wherein the concept of zero rated supply has been framed. The provisions contained in the section 16 are discussed as follows","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/","og_locale":"en_US","og_type":"article","og_title":"Section 16 Zero Rated Supply","og_description":"A new Chapter VIII has been introduced in the IGST Act wherein the concept of zero rated supply has been framed. The provisions contained in the section 16 are discussed as follows","og_url":"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/","og_site_name":"All About Finance","article_published_time":"2016-12-24T09:56:27+00:00","article_modified_time":"2016-12-24T09:57:19+00:00","author":"Ca Pradeep Jain","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Ca Pradeep Jain","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/#article","isPartOf":{"@id":"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/"},"author":{"name":"Ca Pradeep Jain","@id":"https:\/\/taxclick.org\/#\/schema\/person\/5685f61d7533d550639d58aef7a6d4b5"},"headline":"Section 16 Zero Rated Supply (IGST ACT)","datePublished":"2016-12-24T09:56:27+00:00","dateModified":"2016-12-24T09:57:19+00:00","mainEntityOfPage":{"@id":"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/"},"wordCount":736,"commentCount":0,"publisher":{"@id":"https:\/\/taxclick.org\/#organization"},"keywords":["GST","GST Law","Zero Rated Supply"],"articleSection":["GST"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/","url":"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/","name":"Section 16 Zero Rated Supply","isPartOf":{"@id":"https:\/\/taxclick.org\/#website"},"datePublished":"2016-12-24T09:56:27+00:00","dateModified":"2016-12-24T09:57:19+00:00","description":"A new Chapter VIII has been introduced in the IGST Act wherein the concept of zero rated supply has been framed. The provisions contained in the section 16 are discussed as follows","breadcrumb":{"@id":"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/taxclick.org\/type\/gst\/section-16-zero-rated-supply-igst-act\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/taxclick.org\/"},{"@type":"ListItem","position":2,"name":"Section 16 Zero Rated Supply (IGST ACT)"}]},{"@type":"WebSite","@id":"https:\/\/taxclick.org\/#website","url":"https:\/\/taxclick.org\/","name":"All About Finance","description":"","publisher":{"@id":"https:\/\/taxclick.org\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/taxclick.org\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/taxclick.org\/#organization","name":"All About Finance","url":"https:\/\/taxclick.org\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/taxclick.org\/#\/schema\/logo\/image\/","url":"https:\/\/taxclick.org\/wp-content\/uploads\/2016\/01\/taxclick-logo.png","contentUrl":"https:\/\/taxclick.org\/wp-content\/uploads\/2016\/01\/taxclick-logo.png","width":235,"height":68,"caption":"All About Finance"},"image":{"@id":"https:\/\/taxclick.org\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/taxclick.org\/#\/schema\/person\/5685f61d7533d550639d58aef7a6d4b5","name":"Ca Pradeep Jain","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/taxclick.org\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/a305539b3ea58f61ad29adce218ea6c9?s=96&d=ANSPRESS_AVATAR_SRC&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/a305539b3ea58f61ad29adce218ea6c9?s=96&d=ANSPRESS_AVATAR_SRC&r=g","caption":"Ca Pradeep Jain"},"description":"Author is practicing Chartered Accountant, practicing in indirect taxation laws- Central Excise, Customs, Service Tax and DGFT since 1994; having head office at Jodhpur and Branch Office at Ahmedabad. He is prominent speaker in various seminars held on indirect taxation during budget. Addressed various seminars of ICAI chapter, has been faculty for residential courses held by ICAI. He can be reached at Pradeep@capradeepjain.com","url":"https:\/\/taxclick.org\/author\/ca-pradeep-jain\/"}]}},"uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false,"yarpp-thumbnail":false},"uagb_author_info":{"display_name":"Ca Pradeep Jain","author_link":"https:\/\/taxclick.org\/author\/ca-pradeep-jain\/"},"uagb_comment_info":1,"uagb_excerpt":"A new Chapter VIII has been introduced in the IGST Act wherein the concept of zero rated supply has been framed. The provisions contained in the section 16 are discussed as follows:- Zero rated supply means any of the following taxable supply of goods and\/or services, namely- Export of goods and\/or services; or Supply of&hellip;","_links":{"self":[{"href":"https:\/\/taxclick.org\/wp-json\/wp\/v2\/posts\/3737"}],"collection":[{"href":"https:\/\/taxclick.org\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/taxclick.org\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/taxclick.org\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/taxclick.org\/wp-json\/wp\/v2\/comments?post=3737"}],"version-history":[{"count":0,"href":"https:\/\/taxclick.org\/wp-json\/wp\/v2\/posts\/3737\/revisions"}],"wp:attachment":[{"href":"https:\/\/taxclick.org\/wp-json\/wp\/v2\/media?parent=3737"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/taxclick.org\/wp-json\/wp\/v2\/categories?post=3737"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/taxclick.org\/wp-json\/wp\/v2\/tags?post=3737"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}