{"id":9344,"date":"2025-08-10T16:03:25","date_gmt":"2025-08-10T16:03:25","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=9344"},"modified":"2026-03-15T18:36:16","modified_gmt":"2026-03-15T18:36:16","slug":"zero-rated-supply-under-gst","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/zero-rated-supply-under-gst\/","title":{"rendered":"Zero Rated Supply under GST"},"content":{"rendered":"<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-8080\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/10\/GST-bank-account-.jpg\" alt=\"GST bank account\" width=\"1280\" height=\"569\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/10\/GST-bank-account-.jpg 1280w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/10\/GST-bank-account--300x133.jpg 300w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/10\/GST-bank-account--1024x455.jpg 1024w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/10\/GST-bank-account--768x341.jpg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/10\/GST-bank-account--800x356.jpg 800w\" sizes=\"(max-width: 1280px) 100vw, 1280px\" \/><\/h2>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69dff614b39a8\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69dff614b39a8\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/zero-rated-supply-under-gst\/#Zero_Rated_Supply_under_GST\" title=\"Zero Rated Supply under GST\">Zero Rated Supply under GST<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/zero-rated-supply-under-gst\/#Section_16_%E2%80%93_Zero_Rated_Supply\" title=\"Section 16 \u2013 Zero Rated Supply\">Section 16 \u2013 Zero Rated Supply<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/zero-rated-supply-under-gst\/#Rule_89_of_the_CGST_Rules_2017_which_deals_with_Application_for_RefundRule_89\" title=\"Rule 89 of the CGST Rules, 2017 which deals with Application for Refund(Rule 89)\">Rule 89 of the CGST Rules, 2017 which deals with Application for Refund(Rule 89)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/zero-rated-supply-under-gst\/#Refund_of_unutilised_ITC_for_Zero_Rated_Supply\" title=\"Refund of unutilised ITC for Zero Rated Supply: \">Refund of unutilised ITC for Zero Rated Supply: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caindelhiindia.com\/blog\/zero-rated-supply-under-gst\/#Refund_in_case_of_SEZ_supplies\" title=\"Refund in case of SEZ supplies:\">Refund in case of SEZ supplies:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caindelhiindia.com\/blog\/zero-rated-supply-under-gst\/#Other_refund_scenarios_under_Rule_89\" title=\"Other refund scenarios under Rule 89:\">Other refund scenarios under Rule 89:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.caindelhiindia.com\/blog\/zero-rated-supply-under-gst\/#GST_Law_Who_Can_Represent_You\" title=\"GST Law: Who Can Represent You?\">GST Law: Who Can Represent You?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.caindelhiindia.com\/blog\/zero-rated-supply-under-gst\/#What_is_Section_116_of_CGST_Act\" title=\"What is Section 116 of CGST Act?\">What is Section 116 of CGST Act?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.caindelhiindia.com\/blog\/zero-rated-supply-under-gst\/#Who_Can_Be_an_Authorised_Representative_under_GST\" title=\"Who Can Be an Authorised Representative under GST ?\">Who Can Be an Authorised Representative under GST ?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.caindelhiindia.com\/blog\/zero-rated-supply-under-gst\/#Who_CANNOT_Represent_You\" title=\"Who CANNOT Represent You?\">Who CANNOT Represent You?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.caindelhiindia.com\/blog\/zero-rated-supply-under-gst\/#Letter_of_Undertaking_Filing_Requirement_for_Zero%E2%80%91Rated_Supplies_FY_2026%E2%80%9327\" title=\"Letter of Undertaking Filing Requirement for Zero\u2011Rated Supplies FY 2026\u201327\">Letter of Undertaking Filing Requirement for Zero\u2011Rated Supplies FY 2026\u201327<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.caindelhiindia.com\/blog\/zero-rated-supply-under-gst\/#How_to_File_a_Letter_of_Undertaking_Form_GST_RFD%E2%80%9111\" title=\"How to File a Letter of Undertaking (Form GST RFD\u201111) : \">How to File a Letter of Undertaking (Form GST RFD\u201111) : <\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Zero_Rated_Supply_under_GST\"><\/span><span style=\"color: #000080;\"><strong>Zero Rated Supply under GST<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Under the Goods and Services Tax (GST) law, a <em>Zero Rated Supply<\/em> refers to supplies on which GST is charged at 0%, but the supplier can still claim input tax credit for taxes paid on inputs and input services. This ensures that exports remain tax-free but without blocking the credit chain. As per Section 16 of the IGST Act, 2017, Zero Rated Supply includes:<\/p>\n<ol>\n<li>Export of goods or services or both (out of India)<\/li>\n<li>Supply of goods or services to a Special Economic Zone developer or SEZ unit<\/li>\n<\/ol>\n<h3><span class=\"ez-toc-section\" id=\"Section_16_%E2%80%93_Zero_Rated_Supply\"><\/span><span style=\"color: #000080;\"><strong>Section 16 \u2013 Zero Rated Supply<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><strong>Definition: <\/strong>Zero rated supply means any of the following:<\/p>\n<p>a) Export of goods or services or both<br \/>\nb) Supply of goods or services or both to a Special Economic Zone (SEZ) developer or SEZ unit<\/p>\n<p>Entitlement to Input Tax Credit: A registered person making zero rated supply is eligible to claim input tax credit on inputs, input services, and capital goods used in making such supplies, even if the supply is exempt.<\/p>\n<p>Options for Supply: A registered person making zero rated supply can choose either of the following:<\/p>\n<p><span style=\"color: #000080;\"><strong>Option 1:<\/strong><\/span><\/p>\n<ul>\n<li>Supply with payment of IGST<\/li>\n<li>Claim refund of the IGST paid<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>Option 2:<\/strong><\/span><\/p>\n<ul>\n<li>Supply without payment of IGST<\/li>\n<li>Furnish a Letter of Undertaking or a bond before making supply<\/li>\n<li>Claim refund of unutilised input tax credit<\/li>\n<\/ul>\n<p><strong>Key Points:<\/strong><\/p>\n<ul>\n<li>It is different from <em>exempt supply<\/em> \u2014 in exempt supply, input tax credit cannot be claimed.<\/li>\n<li>A zero-rated supply can be made:\n<ul>\n<li>With payment of IGST and then claim refund of IGST paid, or<\/li>\n<li>Without payment of IGST under a <em>Letter of Undertaking \/bond<\/em> and claim refund of unutilised ITC.<\/li>\n<\/ul>\n<\/li>\n<li>The aim is to promote exports and SEZ supplies by ensuring they are free from domestic taxes.<\/li>\n<li>Zero rated supply is different from exempt supply: input tax credit is available here. GST Refund claims must follow the procedure under the CGST Rules (Rule 89). <em>Letter of Undertaking <\/em>is generally available to all exporters except those prosecuted for tax evasion above INR 250 lakh.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Rule_89_of_the_CGST_Rules_2017_which_deals_with_Application_for_RefundRule_89\"><\/span><span style=\"color: #000080;\"><strong>Rule 89 of the CGST Rules, 2017<\/strong> which deals with <strong>Application for Refund(Rule 89)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>&nbsp;<\/p>\n<p>Filing the application: A person claiming refund (including unutilised ITC for zero-rated supplies, excess tax paid, or other eligible refunds) must file Form GST RFD-01 electronically on the GST portal. The application must be accompanied by supporting documents\/evidences as prescribed.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Refund_of_unutilised_ITC_for_Zero_Rated_Supply\"><\/span><span style=\"color: #000080;\"><strong>Refund of unutilised ITC for Zero Rated Supply: <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Applies to exports and supplies to SEZ without payment of IGST under LUT\/Bond.<\/li>\n<li>Refund amount is calculated using this formula<\/li>\n<\/ul>\n<p>Refund\u00a0Amount=Turnover\u00a0of\u00a0Zero\u00a0Rated\u00a0Supply\u00d7Net\u00a0ITCAdjusted\u00a0Total\u00a0Turnover\\text{Refund Amount} = \\frac{\\text{Turnover of Zero Rated Supply} \\times \\{Net ITC}}{\\{Adjusted Total Turnover}}Refund\u00a0Amount=Adjusted\u00a0Total\u00a0TurnoverTurnover\u00a0of\u00a0Zero\u00a0Rated\u00a0Supply\u00d7Net\u00a0ITC\u200b<\/p>\n<p>Where:<\/p>\n<ul>\n<li>Turnover of zero rated supply = value of export of goods\/services and supplies to SEZ (as per GST law)<\/li>\n<li>Net ITC = ITC availed on inputs and input services during the period<\/li>\n<li>Adjusted total turnover = total turnover in a State\/UT excluding exempt supplies (except zero-rated) during the period<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Refund_in_case_of_SEZ_supplies\"><\/span><span style=\"color: #000080;\"><strong>Refund in case of SEZ supplies:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>For supply to an SEZ unit\/developer, the refund application must be accompanied by:\n<ul>\n<li>Endorsement from the SEZ officer that goods\/services have been received for authorised operations<\/li>\n<li>Proof of payment by the recipient in case of supply of services<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Other_refund_scenarios_under_Rule_89\"><\/span><span style=\"color: #000080;\"><strong>Other refund scenarios under Rule 89:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Refund of tax paid on deemed exports<\/li>\n<li>Refund in case of excess payment of tax<\/li>\n<li>Refund of tax paid by specialised agencies like UN bodies, embassies, etc.<\/li>\n<\/ul>\n<p>Time limit: Refund application to be filed within 2 years from the relevant date as defined in Section 54 of the CGST Act.<\/p>\n<p>Important Exclusions: No refund of unutilised ITC is allowed if the export duty is payable or where ITC is on restricted goods\/services under Rule 54.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"GST_Law_Who_Can_Represent_You\"><\/span><span style=\"color: #000080;\"><strong>GST Law: Who Can Represent You?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-9345\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/08\/GST.png\" alt=\"GST..\" width=\"1013\" height=\"1460\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/08\/GST.png 390w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/08\/GST-208x300.png 208w\" sizes=\"(max-width: 1013px) 100vw, 1013px\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"What_is_Section_116_of_CGST_Act\"><\/span><span style=\"color: #000080;\"><strong>What is Section 116 of CGST Act?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Covers representation before:<\/p>\n<ul>\n<li>GST Officers<\/li>\n<li>Appellate Authorities<\/li>\n<li>GST Tribunal<br \/>\n(Except when personal oath\/affirmation is required)<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Who_Can_Be_an_Authorised_Representative_under_GST\"><\/span><span style=\"color: #000080;\"><strong>Who Can Be an Authorised Representative under GST ?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Relative or regular employee<\/li>\n<li>Advocate (not debarred)<\/li>\n<li>Practicing CA, CMA, or CS<\/li>\n<li>Retired Group-B+ GST\/CT officer (with \u2265 2 years\u2019 service)<\/li>\n<li>Certified GST Practitioner (GSTP)<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><em>Note:<\/em> Retired officers must wait 1 year post-retirement before appearing.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Who_CANNOT_Represent_You\"><\/span><span style=\"color: #000080;\"><strong>Who CANNOT Represent You?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Dismissed\/removed government employees<\/li>\n<li>Convicted tax\/GST offenders<\/li>\n<li>Persons guilty of professional misconduct<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>Other Key Points<\/strong><\/span><\/p>\n<ul>\n<li>Disqualification under State GST\/UTGST also applies to CGST.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Letter_of_Undertaking_Filing_Requirement_for_Zero%E2%80%91Rated_Supplies_FY_2026%E2%80%9327\"><\/span><span style=\"color: #000080;\"><strong>Letter of Undertaking Filing Requirement for Zero\u2011Rated Supplies FY 2026\u201327<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-10248\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/08\/LUT-2026-27.jpeg\" alt=\"Letter of Undertaking Filing Requirement for Zero\u2011Rated Supplies FY 2026\u201327\" width=\"1114\" height=\"1277\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/08\/LUT-2026-27.jpeg 969w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/08\/LUT-2026-27-262x300.jpeg 262w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/08\/LUT-2026-27-893x1024.jpeg 893w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/08\/LUT-2026-27-768x881.jpeg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/08\/LUT-2026-27-800x917.jpeg 800w\" sizes=\"(max-width: 1114px) 100vw, 1114px\" \/><\/p>\n<p>Businesses engaged in the export of goods, export of services, or supplies to SEZ units\/developers must ensure timely filing of the Letter of Undertaking to continue making zero\u2011rated supplies without payment of IGST from 1 April 2026.<\/p>\n<p>A letter of undertaking allows exporters and SEZ suppliers to supply without payment of IGST. Valid for one financial year only \u2014 a new Letter of Undertaking is required every year. Must be filed online on the GST Portal before the start of the new financial year. Letter of Undertaking for FY 2026\u201327 must be filed on or before 31 March 2026.<\/p>\n<p>Important Compliance Warning-related Letter of Undertaking: If a letter of undertaking is not filed before making zero\u2011rated supplies, the taxpayer will be required to pay IGST upfront and later claim a refund of the IGST paid. This can lead to working capital blockage, longer refund cycles, and unnecessary procedural delays. Timely filing avoids these issues entirely.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"How_to_File_a_Letter_of_Undertaking_Form_GST_RFD%E2%80%9111\"><\/span><span style=\"color: #000080;\"><strong>How to File a Letter of Undertaking (Form GST RFD\u201111) : <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Eligible taxpayers can file Letter of Undertaking online by<\/p>\n<ol>\n<li>Logging into the GST Portal<\/li>\n<li>Navigating to Services \u2192 User Services \u2192 Furnish Letter of Undertaking<\/li>\n<li>Selecting Form GST RFD\u201111<\/li>\n<li>Uploading required details and submitting with DSC\/EVC<\/li>\n<\/ol>\n<p>The process is paperless and usually takes only a few minutes.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Zero Rated Supply under GST Under the Goods and Services Tax (GST) law, a Zero Rated Supply refers to supplies on which GST is charged at 0%, but the supplier can still claim input tax credit for taxes paid on inputs and input services. This ensures that exports remain tax-free but without blocking the credit &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[933],"tags":[1204],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/9344"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=9344"}],"version-history":[{"count":3,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/9344\/revisions"}],"predecessor-version":[{"id":10250,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/9344\/revisions\/10250"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=9344"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=9344"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=9344"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}