Zero Rated Supply :
As per the GST Act, export of goods and Services supplied to other countries and supplies to a unit located in Special Economic Zone or to a developer of SEZ are considered as Zero Rated. Concept of zero rated supplies of goods and services has
following objectives –
(a) Taxes paid on supplies which are Zero Rated are refunded.
(b) Input Tax credit on inputs, input services and capital goods used in such supplies is allowed.
(c) When the supplies are made without payment of tax, the taxes paid on the inputs or input services – i.e. the unutilized input tax credit is refunded.
Thus, to qualify any transaction to be considered as Export of Goods, it must carry the goods outside the territory of India. If the goods are not physically moving out of territory of India, the transaction cannot be considered as Export of goods, even if the payment is received in foreign exchange.