Zero-Rated Law and Legal Definition

Zero-Rated denotes goods on which the buyer pays no value-added tax . The term is applied to items that would normally be taxed under valued-added systems. The significance of this rating is that businesses selling such goods may claim back their input tax (the VAT which they have paid to their suppliers). Businesses which provide goods and services which are VAT exempt (for example, stamps and postal services) are not able to reclaim input tax