Which of the following is an example of a zero-rated supply?

Children's clothing is classified as a zero-rated supply because it is typically exempt from Value Added Tax (VAT) in many jurisdictions to promote affordability and accessibility for families. This means that while businesses selling children's clothing do not charge VAT on these items, they are allowed to claim back any VAT they have incurred on their business expenses related to these items. The intention behind this policy is to lighten the financial load on parents and guardians, making essential clothing for children more affordable.

This zero-rating status often applies specifically to items designed for children under a certain age, thereby fostering a supportive environment for families. Other examples of zero-rated supplies can include basic food items and certain medical goods, which share the objective of relieving financial pressure on consumers.

In contrast, imported goods generally attract VAT upon entry into the country, while luxury items and electronic devices are usually standard-rated, meaning they are subject to the standard VAT rate if sold.