Suggestions on GST Acts (July 2017) by Institute of Chartered Accountants of India
51. Definition of Zero Rated Supply – already referred in general clause.
Section 2(23) of the IGST Act provides that “zero-rated supply” shall have the meaning assigned to it in section 16 of IGST Act.
Further Section 16(1) of IGST Act provides “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.
Explanation- For the purposes of this sub-section, exempt supplies shall include supplies on which recipient is liable to pay tax on reverse charge basis under subsection (3) of section 8.
Issue
Section 16(1) refers to the possibility of a zero-rated supply being covered both under the CGST Act and under the IGST Act. However, this situation is not enabled by the definition. Zero rated supply (as used in section 16(1)) is understood to mean a supply where the applicable rate is 0%.
Secondly, definition of zero rated supply shall have the meaning assigned to it under section 16 and not section 16 of IGST Act as provided in the definition.
Suggestion
Also exclude the use of ‘zero rated supply under this Act’ in section 17(2) of the CGST Act.
Read ICAI Suggestions on GST Act to Govt : July 2017
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