Zero-Rated Supply
Definition
A supply taxed at zero per cent where the supplier may still reclaim input tax, in India covering exports and supplies to Special Economic Zones. Zero-rating preserves input credit, which is what distinguishes it from an exempt supply.
Related Terms in India GST
Exempt Supply
A supply on which no GST is charged and for which related input tax credit cannot be claimed. Because credit is blocked, embedded tax becomes a cost, making exemption materially different from zero-rating.
Composition Scheme
A simplified GST option for smaller Indian taxpayers that substitutes a flat rate on turnover for normal rate-wise tax, with reduced filing. Participants cannot collect GST from customers or claim input tax credit, and eligibility turnover limits and rates are set by the GST Council.
Place of Supply
The rule determining where a supply is treated as made, which decides whether CGST and SGST or IGST applies. It turns on goods movement or, for services, on recipient location and specific rules for immovable property, events, transport and digital services. Getting it wrong produces tax paid under the wrong head.
ITC Reversal
Giving back input tax credit already claimed, required where goods are used for exempt or personal purposes, where a supplier is not paid within the prescribed period, on credit notes received, or for stock written off. Reversals are reported in the GST return and may carry interest.
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