Correct Definition of Zero Rated Supply under GST : ICAI Suggestions

By | August 15, 2017
(Last Updated On: August 15, 2017)

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

Related Topic on GST

TopicClick Link
GST Acts Central GST Act and States GST Acts
GST RulesGST Rules
 GST FormsGST Forms
GST RatesGST Rates
GST NotificationsGST Act Notifications
GST CircularsGST Circulars
 GST JudgmentsGST Judgments
GST Press ReleaseGST Press Release
GST BooksBest Books on GST in India
GST CommentaryTopic wise Commentary on GST Act of India
GST You Tube ChannelTaxHeal You Tube Channel
GST Online CourseJoin GST online Course
GST HistoryGST History and Background Material
Category: GST

About CA Satbir Singh

Chartered Accountant having 12+ years of Experience in Taxation , Finance and GST related matters and can be reached at Email : Taxheal@gmail.com

Leave a Reply

Your email address will not be published.