Glossary
Zero-Rated Supply
Zero-Rated Supply
Zero-Rated Supply A zero-rated supply refers to goods or services that are exported or supplied to a Special Economic Zone (SEZ). These supplies are taxed at a 0% [VERIFY] rate, meaning the entire value chain is free from tax.
Where it appears in practice
It matters for exporters and businesses supplying to SEZs, as they can either export without paying integrated tax under a Letter of Undertaking (LUT) or pay the tax and claim a refund.
A worked example
An Indian manufacturer exports software to a client in the USA. The export is a zero-rated supply, and the manufacturer can claim a refund for any taxes paid on inputs used to develop the software.
Related terms
- Exempt Supply
- Special Economic Zone (SEZ)
- Letter of Undertaking (LUT)
Let the practice handle it
This term sits inside real compliance work — returns, filings, and deadlines. That work is one of the services the practice runs end to end.
GST Registration