Zero Rated GST Items: Updated List for 2026
If you are searching for zero rated GST items, it is important to know one thing first. In India, zero rated is mainly decided by the type of supply, not by a product wise item list. That is why the same goods can be normal rated in India, but become zero rated when supplied as exports or to SEZ for authorised operations.
What Are Zero Rated GST Items?
Zero rated GST means the outward GST becomes zero, but you can still claim input tax credit on inputs and input services used for that supply. Many businesses use this mainly for exports and SEZ supplies.
Definition and Legal Basis of Zero Rated GST
Zero rated supply generally covers two categories.
- Export of goods or services or both.
- Supply of goods or services or both to an SEZ unit or SEZ developer for authorised operations.
So, the law treats the supply as zero rated because it goes outside India or to SEZ for authorised operations.
Updated List of Zero Rated GST Items in 2026
For 2026, the practical list remains the same because zero rating is still based on exports and SEZ supplies. Below is the clearest way to understand the updated list.
| Zero rated category | What it includes | Simple examples |
|---|---|---|
| Export of goods | Goods sent from India to a place outside India | Garments, engineering goods, pharma, food items, handicrafts, and more |
| Export of services | Services supplied outside India when export conditions are met | IT services, design services, consulting, marketing services, and more |
| Supply to SEZ | Supply of goods or services to SEZ unit or SEZ developer for authorised operations | Raw material, machinery, professional services, logistics services |
Zero Rated GST Goods
Zero rated goods are mainly.
- Export of goods from India to outside India.
- Supply of goods to SEZ unit or SEZ developer for authorised operations.
There is no separate list like milk, rice, sugar, etc for zero rated inside India. Zero rated depends on export or SEZ supply.
Zero Rated GST Services
Zero rated services are mainly.
- Export of services, when all export of services conditions are satisfied.
- Supply of services to SEZ unit or SEZ developer for authorised operations.
For export of services, businesses must check key points like recipient outside India, place of supply outside India, and receipt of payment in permitted mode.
How Zero Rated GST Benefits Businesses
Zero rated supply helps businesses because GST does not become a cost in exports and SEZ supplies.
Impact on Exporters and International Trade
Here is how it helps.
- Better pricing in global markets because GST does not add to the export price.
- Refund option for unused input tax credit, which improves cash flow.
- Cleaner compliance structure for exporters because exports are treated separately in returns and refund process.
How to Claim Zero Rated GST
There are two common ways to claim zero rated benefits.
- Export or supply to SEZ under LUT or bond without paying IGST, then claim refund of unutilised ITC.
- Pay IGST on the zero rated supply, then claim refund of IGST paid.
In practice, many exporters prefer LUT route to avoid cash blockage.
Required Documentation and Compliance for Zero Rated GST Claims.
Keep documentation clean because refund issues usually happen due to mismatch or missing proof.
For export of goods
- LUT in Form GST RFD 11 if exporting without IGST payment.
- Export invoice with correct details.
- Shipping bill details matching with return data.
- Proof of export as per shipping and customs records.
For export of services
- Contract or agreement and invoice.
- Proof that recipient is outside India.
- Proof that place of supply is outside India as per GST rules.
- Proof of payment received in permitted mode, like bank certificates.
- Clear reporting in GST returns.
For SEZ supplies
- Invoice for supply to SEZ.
- Proof that supply is for authorised operations.
- Endorsement or confirmation as required by SEZ process.
- Refund application documents if you are claiming refund.
Refund filing
Refund is usually filed in Form GST RFD 01 on the GST portal for accumulated ITC or IGST refund, based on the route you use.
Zero Rated GST vs Exempt GST: What’s the Difference?
Many people confuse zero rated with exempt. They are not the same.
| Point | Zero rated supply | Exempt supply |
|---|---|---|
| GST on outward supply | Treated as 0, mainly for exports and SEZ | No GST charged because it is exempt or nil rated |
| Input tax credit | ITC is allowed | ITC is usually not allowed |
| Refund option | Refund of unused ITC or IGST can be claimed | No refund just because it is exempt |
| Best example | Export of goods or services, supply to SEZ | Items covered under exemption notifications for domestic supply |
Common Issues and Misconceptions about Zero Rated GST
Most confusion happens because people think zero rated is a list of items. In India, it is mainly a supply category.
Key Points to Remember When Dealing with Zero Rated GST
- There is no universal product list called zero rated items for domestic sales.
- Export of services needs careful checking of conditions. One missed condition can make it a normal taxable supply.
- Refund delays commonly happen due to mismatch between invoices, GSTR 1, GSTR 3B, and shipping bill details.
- LUT should be filed before making exports without IGST payment.
Can I Claim Input Tax Credit (ITC) on Zero Rated GST Items?
Yes. ITC can be claimed on inputs and input services used for making zero rated supplies. If ITC remains unused, you can apply for refund as per the correct route and rules.
Conclusion
In 2026, zero rated GST is still mainly for exports and SEZ supplies for authorised operations. It is not a product wise 0% list. If you follow the right route, keep documents ready, and report details correctly in returns, you can keep your outward tax burden at zero and still claim ITC and refunds.
Hi there! I’m a Chartered Accountant with over 20 years of experience in financial accounting and a passion for writing. I enjoy simplifying complex topics like GST and income tax, believing that learning should be a lifelong journey. I'm here to share insights and make financial matters easier for everyone!
Frequently Asked Questions
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What Items Are Included in Zero Rated GST in 2026?
Zero rated GST in 2026 is not an item list. It includes exports of goods, exports of services that meet conditions, and supplies to SEZ unit or SEZ developer for authorised operations.
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Can I Claim Input Tax Credit (ITC) on Zero Rated GST Items?
Yes. ITC is allowed for zero rated supplies, and refund of unused ITC can be claimed if you follow the process.
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Are Exports Considered Zero Rated Under GST?
Yes. Exports of goods and exports of services are treated as zero rated supplies under GST, subject to conditions for export of services.
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Do I Need Special Documentation for Zero Rated GST Claims?
Yes. You need documents like LUT where applicable, invoices, shipping bill related proof for goods, payment proof for services, and correct return reporting for refund processing.
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How Do Zero Rated GST Items Impact the Pricing of Goods and Services?
Zero rating helps keep exports competitively priced because GST does not add to the final export cost. It also helps cash flow because businesses can claim refund of eligible ITC instead of treating it as a cost.