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India applies the zero rate of GST to exports of goods and services. With effect from 1 October 2023, the provisions for zero rating are also applicable in respect of supplies to a SEZ unit/developer undertaking authorised operations.

GST is a destination-based tax and the government of India has adopted a policy measure to not collect taxes in respect of supplies by way of export where the place of effective consumption of the supplies is outside India.

A registered person is required to examine the place of supply provisions in the IGST Act to ensure that the place of supply falls outside the territory of India in order to classify the supply as an export of goods or services (see also 22.78 and 22.81).

Provided the requirements are met, exports enjoy the benefit of a zero rate, ie tax is not collected from the recipient of the supply. However, the input tax credit claimed on business expenditure incurred for making export supplies would remain unused in the hands of the supplier due to the zero rating. In order to incentivise