(1) Where any goods are exported outside the territory of India or are supplied in the course of such export falling within the scope of section 5 of the Central Sales Tax Act, 1956, or where such goods are sold or supplied to SEZ's (Special Economic Zones) within the country or where such goods are sold or supplied across Line of Control (LOC), such sales shall be Zero- rated.

(2) For every sale made in terms of sub-section 1 above, an input tax credit shall be allowed and the dealer shall be entitled to the refund of the input tax paid in the State.

(3) Subject to the provisions of the Act and the rules made there under, the Assessing Authority shall refund to the dealer the amount of input tax paid by the dealer as per sub-section 2 above, within a period of 120 days from the date of such sales.

(4) In case where a registered dealer entitled to refund under sub-section (3) is not granted refund within the prescribed period, he shall upon making an application in the prescribed manner to the prescribed authority be entitled to receive in addition to the refund, simple interest @ 18% per annum on the said amount from the day immediately following the expiry of the prescribed period, if the delay in grant of refund does not exceed three months and at the rate of 24% per annum if the delay exceeds three months from the expiry of the prescribed period.