Q1 - Does zero rated supply fall in the definition of exempt turnover ? Q2 - A person engaged in supply of 100% of his services to SEZ , is he required to take registration ?? Can he take the benefit of Section 23(1)(a) and not require to be registered?

Reply—

1) Under Section 16(1) of the IGST Act, following are treated as zero-rated supplies:

1. Export of goods or services or both

2. Supply of goods or services to Special Economic Zone developer or a Special Economic Zone unit.

Zero-rated supply does not mean that the goods or services are nil rated or are taxed at 0 % tax.

As per Section 2(47) of the CGST Act: “exempt supply” means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply.

2) Persons making any inter-state taxable supply are required compulsory registration under section 24 of CGST Act. Therefore, in case of inter-state supply of goods (including Exports), GST registration is required even if turnover is less than Rs. 20 lakhs.

However if your client is engaged exclusively in providing exempted goods or service or both, registration is not required as per section 23 of CGST Act.