zero-rated supply

zero-rated supply A supply that is within the scope of value-added tax but is charged at a nil rate. Examples are food (excluding restaurant and take-away meals), books and journals, and children's clothes; all exports are also zero-rated. Unlike exempt supplies, zero-rated supplies count towards the turnover limit above which registration for VAT is compulsory, and any input tax relating to them may be reclaimed by the registered trader.