Meaning of Zero Rated

Zero rated VAT means that the supply of goods or services is still subject to VAT but the rate of VAT is 0%. In essence, this means that a supplier is not required to charge VAT on their sales, but may still claim back any VAT that they may have on their inputs. VAT tax exempt on the other hand means that the supply of the goods and services is not subject to VAT at all. The supplier in this case cannot charge VAT on sales or claim VAT on their inputs.