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;

1. Essential goods listed in Schedule 1 of the GST Act,
2. Goods and services exported from the Maldives,
3. Transfer of business as a going concern.

Schedule 1 specifies 22 types of “essential goods” that are zero-rated.

1. Rice, sugar and flour
2. Salt
3. Milk
4. Cooking oil
5. Eggs
6. Tea leaves
7. Deep sea fish, reef fish, all types of fish packed in the Maldives, and rihaakuru
8. Potatoes and onions
9. Ingredients used in making curry paste (cumin, fennel, coriander seed, turmeric, garlic, ginger, chili, chili powder, cinnamon, cardamom, peppercorn, and any other such ingredient)
10. Dhiyaahakuru, kaashi, kurun’baa, rukuraa, and kurolhi
11. Carrots, cabbage, beans and tomatoes
12. Fruits
13. Bread, buns and rusk
14. Baby food
15. Baby diapers and adult diapers: all kinds of baby diapers and adult diapers, including cloth diapers, are zero-rated
16. 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.
17. 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;