Zero-rated goods and services
When a good or service is “zero-rated,” it means that the good or service is still subject to GST, but the rate of GST that applies to the good or service is 0%. The supply of zero-rated goods and services are considered as part of the suppliers ‘taxable supplies”.
When a good or service is zero-rated;
- The supplier must not collect any GST from the recipient of the good or service.
- The supplier can claim input tax he paid to other GST registered persons in relation to the supply of zero-rated goods or services.
- The supplier must raise a tax invoice whenever he supplies a zero-rated good or service to another GST registered person.
Suppliers of zero-rated goods and services must record zero-rated transactions and report them on their GST Return.
There are three main categories of zero-rated goods and services;
- Essential goods listed in Schedule 1 of the GST Act,
- Goods and services exported from the Maldives,
- Transfer of business as a going concern.
List of essential goods zero-rated for the purpose of GST
Schedule 1 specifies 22 types of “essential goods” that are zero-rated.
- Rice, sugar and flour
- Cooking oil
- Tea leaves
- Deep sea fish, reef fish, all types of fish packed in the Maldives, and rihaakuru
- Potatoes and onions
- Ingredients used in making curry paste (cumin, fennel, coriander seed, turmeric, garlic, ginger, chili, chili powder, cinnamon, cardamom, peppercorn, and any other such ingredient)
- Dhiyaahakuru, kaashi, kurun’baa, rukuraa, and kurolhi
- Carrots, cabbage, beans and tomatoes
- Bread, buns and rusk
- Baby food
- Baby diapers and adult diapers: all kinds of baby diapers and adult diapers, including cloth diapers, are zero-rated
- Cooking gas, diesel and petrol: cooking gas, diesel and petrol are zero-rated. However, other fuel oils such as kerosene and jet fuel are not zero-rated. Lubricating oils are also subject to GST at the standard rate.
- Sanitary napkins, tampons, menstrual cups and other such products.
There are detailed rules and conditions regarding zero-rated goods and services. Please refer to the following guides for the detailed rules and conditions;