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Value of Zero rated supply as per new Rule 89(4)(C) w.e.f. 23-03-2020, Goods and Services Tax - GST

Issue Id: - 117293
Dated: 22-6-2021
By:- Vinay Kunte
Value of Zero rated supply as per new Rule 89(4)(C) w.e.f. 23-03-2020

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Respected Sir,

This query is in connection with the amendment made to Rule 89 (4) (C) with effect from 23-03-2020, in respect of the calculation for the Value of Zero-Rated supplies is as under:

The amended Rule reads as under:

Rule 89(4)(C) ― “Turnover of zero-rated supply of goods" means the value of zero-rated supply of goods made during the relevant period without payment of tax under bond or letter of undertaking or the value which is 1.5 times the value of like goods domestically supplied by the same or, similarly placed, supplier, as declared by the supplier, whichever is less, other than the turnover of supplies in respect of which refund is claimed under sub-rules (4A) or (4B) or both;]”

Now, if the Exporter has only 10-15% of supply domestically and exports the remaining 85-90% goods, the value of the Goods exported will always be much more than 1.5 Times the value of the goods supplies domestically and hence the Zero-Rated Supply will always be considered well below the actual value of the goods exported based on the above amendment of 1.5 times the value of the Goods supplied domestically.

Will it not be drastically unfair to the exporter? Or is it that the same value of Zero-Rated supplies is to be considered for determination of Adjustable Turnover for the period under consideration for Refund claim which is to be determined as per Rule 89(4)(E)?

Can you please elaborate? Please provide your valuable guidance in the matter, as always.

With Regards,

Vinay V Kunte

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Showing Replies 1 to 2 of 2 Records

1 Dated: 23-6-2021
By:- Rajagopalan Ranganathan


In my opinion you have to invoke the writ jurisdiction of High Court under Art. 226 of Constitution of India challenging the wires of the said rule.

2 Dated: 23-6-2021
By:- Rajagopalan Ranganathan


Please read "vires" instead of "wires". The error is regretted.


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