Major difference between Zeros Rated Supply and Zero Rate on Exports

Zero rated supply

The supply of goods or services or both, i.e, the Export of goods or services or both, or supply of goods or services or both to a special economic zone developer or a special economic zone unit can be called as Zero Rated Supply.

As per the prescribed laws under GST, Zero Rate on Exports would denote that the GST would not be applicable on export of goods or services from India. Businesses that have done online GST Registration can enjoy the benefits of GST with regards to interstate and intrastate business as well. Now, as per the provisions of the place of supply, the transaction with regards to the supply of goods or supply of services that qualifies as export out of India would be deemed as Zero Rated Supply.

Zero Rate on Exports Under Goods and Service Tax

No goods or service exported from India would charged under Goods and Service Tax. A transaction would be zero rated if the supply of services and the supply of goods qualify as export out of India as per the provisions of the place of supply. The supplier would be allowed to export goods or services out of India with no charges levied. But facilities like CGST/SGST and IGST credits can be availed by the supplier.

There are several advantages and benefits of GST that business can reap. Under GTS Law, one need not pay extra charge while exporting goods out of India. 

The intricacies of the Zero Rate on Exports under GST have been enumerated below:

Options to consumer:

The free trade between states and throughout the country would help the consumer with more options.

Decrease in price:

Since there is a decrease in the tax on most products, the purchase price would reduce to a considerable extent. In case the product hitherto has not been subjected to tax, then the price would inflate.

Transparency:

The invoice given to the customer would contain the exact tax paid.

Zero Rated Supplies under Goods and Service Tax

The export of goods or services or both or the supply of goods or services or both to a special economic zone unit or a special economic zone developer can be called as a Zero Rated Supply. Thecredit tax which are subject to the provisions of the sub-section (5) of the section 17 of the Central Goods and Services Tax Act, may be availed for zero rated supplied regardless that such supply may be an exempt supply.

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