Meaning of zero rated supply:

Section 16 of revised  IGST Act provide for the Zero rated supply. This section will  cover the provisions related to the benefit provided to the exporters. “zero rated supply” means any of the following taxable supply of goods and/or services, namely –
(a) export of goods and/or services; or
(b) supply of goods and/or services to:

a) An SEZ developer or

b) An SEZ unit.

Supply to SEZ developer or unit is also covered in “zero rated supply”. 

Input tax credit on Zero rated supplies: 

 Subject to provisions of sub-section (3) of section 17 of the CGST Act, 2016, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply. The SEZ developer or SEZ unit receiving zero rated supply  shall be eligible to claim refund of IGST. Amount of refund will be equal to the amount paid by the registered taxable person on such supply.This eligibility will be subject to the conditions, safeguards and procedure as may be prescribed in this regard.

Options to claim benefit of Input Tax credit on Zero rated supply: 

A registered taxable person exporting goods or services shall be eligible to claim refund under one of the following two options, namely –
(a) a registered taxable person may export goods or services under bond, , without payment of IGST. This supply will be subject to such conditions, safeguards and procedure as may be prescribed in this regard. Supplier can claim refund of unutilized input tax credit in accordance with provisions of section 48 of the CGST Act, 2016 read with  rules made thereunder;
(b) a registered taxable person may export goods or services, on payment of IGST and claim refund of IGST paid on goods and services exported in accordance with provisions of section 48 of the CGST Act, 2016 read with rules made thereunder. This export will be subject to such conditions, safeguards and procedure as may be prescribed in this regard.