NACIN Mumbai develops a Flyer on ‘Refund of Integrated Tax Paid on Account of Zero Rated Supplies [Read Concept Note]

In a bid to sensitize the trade on the issue of IGST refund NACIN Mumbai has developed a flyer on ‘Refund of integrated tax paid on account of zero-rated supplies under the Goods and Services Tax (GST) regime.

Under GST, Exports and supplies to SEZ are zero-rated as per section 16 of the IGST Act, 2017. By zero rating it is meant that the entire supply chain of a particular zero-rated supply is tax-free i.e. there is no burden of tax either on the input side or on the output side. This is in contrast with exempted supplies, where only output is exempted from tax but tax is levied on the input side. The essence of zero rating is to make Indian goods and services competitive in the international market by ensuring that taxes do not get added to the cost of exports.

The objective of zero-rating of exports and supplies to SEZ is sought to be achieved through the provision contained in Section 16(3) of the IGST Act, 2017, which mandates that a registered person making a zero-rated supply is eligible to claim refund in accordance with the provisions of section 54 of the CGST Act, 2017.

The flayer prescribes the procedure for filing of claims manually. It further prescribes Special Procedure to facilitate smooth refund of Central Tax and State Tax.