DEEMED EXPORTS
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DEEMED EXPORTS
Deemed Exports Scheme
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What is Deemed exports?
“Deemed Exports” refers to those transactions in which the goods supplied do not leave the country and the payment for such supplies is received either in Indian rupees or in free foreign exchange. Deemed export transactions are majorly goods supplied to:
1)An Export Oriented Unit (EOU)/ Electronic Hardware Technology Park Unit (EHTP) / Software Technology Park Unit (STP) / Bio-Technology Park Unit (BTP).
2)Units in Special Economic Zone (SEZ)
3)A specified infrastructure projects.(Projects funded by Unilateral or multilateral agencies)
4)A party that has an Advance Authorization (AA)/ Advance License
5)A recipient who is a holder of an Export Promotion Capital Goods Authorization (EPCG scheme). This condition is applicable in case of supply of capital goods.
6)Additionally, Transactions made against Duty-Free Import Authorization (DFIA) can also be categorized under Deemed Exports.
The government has launched deemed export scheme to extend the benefits/incentives enjoyed by exporters to deemed exporters/suppliers thereby empowering India’s domestic industry against the import of goods by providing benefits or exemptions on taxes/duties paid in India and duty-free inputs.
Deemed Export Benefit Scheme:
The government has launched deemed export scheme to extend the benefits/incentives enjoyed by exporters to deemed exporters/suppliers thereby empowering India’s domestic industry against the import of goods by providing benefits or exemptions on taxes/duties paid in India and duty-free inputs.
Eligibility criteria for qualifying under Deemed Export Benefits:
According to the conditions discussed in the foreign Trade Policy, following are the criteria for a supply to be classified as Deemed Export Supply for claiming Deemed Export benefits:
Benefits of Deemed Exports Scheme:
The goods supply which is categorized under Deemed Export receive the following benefits:
How do we help in claiming benefits of Deemed Export Scheme?
Frequently Asked Questions
All you need to know before applying for Deemed Exports Scheme:
The transactions in which goods supplied do not leave the country and payment for the same is either received in INR or in free foreign exchange are categorized under deemed exports.
Supply of goods under following categories by a manufacturer and by main/ sub-contractors shall be regarded as ‘deemed exports’:-
- Supply of goods against Advance Authorization/ DFIA/capital goods against EPCG Authorization and to EOU.
- Supply to Project financed by multilateral/ bilateral agencies, ICB, UN Projects, Nuclear Power Projects, etc.
Deemed exports shall be eligible for any / all of following benefits in respect of manufacture and supply of goods, qualifying as deemed exports, subject to terms and conditions as given in HBP and ANF-7A:
- Advance Authorisation / Advance Authorisation for annual requirement / DFIA.
- Deemed Export Drawback.
- Exemption from IGST till 30.9.2021
- Refund of terminal excise duty for excisable goods mentioned in Schedule 4 of Central Excise Act 1944 provided the supply is eligible under that category of deemed exports and there is no exemption.
Supplier/ Recipient may file the application in ANF7A to the concerned RA. In case of supply of goods to EOU, claim is required to be filed to the concerned Development commissioner, if claimed by EOU.
Yes, supply of Cement & Steel also be eligible for Deemed Export benefits to such projects.
For supply to Advance/EPCG License holders & to EUO, etc., application can be filed within 12 months from the last date of such supplies. For supply to Projects, etc. within 12 months from the date of receipt of supplies by the project authority or from the date of receipt of payment by the supplier.
Exports i.e. the goods that are transported out of India are zero-rated under GST. This means that no GST rate is levied on deemed exports for goods as such. However, deemed exports are not zero-rated, and hence GST is levied on the goods that qualify as deemed exports. The supplier can avail of a full refund of this tax.
The central government has notified a wide range of transactions that can qualify as deemed export under the Central Government Notification No. 48/2017- Central Tax. Since these transactions are not zero-rated, the supplier or the receiver has to pay tax on the supply of deemed exports. However, these taxes also qualify for refund for deemed export under GST.
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