CA Yogesh Sharma

CA Yogesh Sharma

It is often misunderstood about the meaning of ZERO RATED and NIL RATED terms which may lead to incorrect filings and submission in GST, therefore we need to understand the difference between these terms.

At present 7 rates structure exist in GST 0%, 0.25%, 3% 5%, 12%, 18% and 28% with Schedule I to VII respectively.

Meaning of terms:

1. NIL Rated Goods or services on which GST rate of 0% is applicable (listed in Schedule 1 in the GST rate schedule) are called nil rated goods or services. Supply of any of these goods or Services is a nil rated supply under GST. → No Input Tax Credit available in case NIL rate supplies
2. ZERO Rated There is a common misunderstanding that supplies liable to 0% tax rate are the zero rated supplies which is wrong.  In GST Zero rated supplies are the ones which are executed Under Section 16 of the IGST Act. It includes:

  • Export of goods or services or both
  • Supply of goods or services or both to a SEZ developer or SEZ Unit

Input Tax Credit is available in ZERO rated supplies, Refund can be taken for unutilized Input Tax Credit

Consequence of Filing using wrong term :

In case of discrepancies between  data furnished by taxpayer in GSTR 3B & GSTR 1 and Shipping Bill/Bill of export the lower of the two will be allowed as refund.

For discrepancies data furnished in GSTR-3B and GSTR-1 Refund can be on hold.

If Refund is on hold due to mismatch in GSTR-3B and GSTR-1 data “Table 9 of GSTR 1 of subsequent periods needs to be filled i.e Amendments table” Refund will be processed after considering amendments in Table 9.

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Category : Goods and Services Tax (7641)
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Tags : goods and services tax (6113) GST (5714)

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