Section 16 IGST Act 2017 – Zero rated supply

By | April 22, 2017
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(Last Updated On: June 16, 2018)

Section 16 IGST Act 2017

Summary of Section 16 IGST Act 2017

Section 16 IGST Act 2017 Notified w.e.f 01.07.2017 vide  Notification No. 3/2017 – Integrated Tax Dated 28th June, 2017

Section 16 IGST Act 2017 deals with Zero rated supply and is covered in CHAPTER VII
ZERO RATED SUPPLY

( Note IGST Act 2017 also known as THE INTEGRATED GOODS AND SERVICES TAX ACT, 2017 received the Assent of the President of India on 12th April 2017. This is an Act to make a provision for levy and collection of tax on inter-State supply of goods or services or both by the Central Government and for matters connected therewith or incidental thereto.)

Section 16 IGST Act 2017 : Zero rated supply

16. (1) “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. [Note -2]

(2) Subject to the provisions of sub-section (5) of Section 17 of the Central Goods and Services Tax Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply.

(3) A registered person making zero rated supply shall be eligible to claim refund under either of the following options, namely:––

(a) he may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed [ Note -1,2 ], without payment of integrated tax and claim refund of unutilised input tax credit; or

(b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied,

in accordance with the provisions of Section 54 of the Central Goods and Services Tax Act or the rules made thereunder.


Notes on Section 16 IGST Act 2017

2 Subject to the provisions of section 17(5) of the CGST Act, if event management services, hotel, accommodation services, consumables etc. are received by a SEZ developer or a SEZ unit for authorised operations, as endorsed by the specified officer of the Zone, the benefit of zero rated supply shall be available in such cases to the supplier : Circular No 48/22/2018 GST issued on 14.06.2018

1 refer GST RFD 11 Furnishing of bond or Letter of Undertaking for export of goods or services under GST


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