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Deemed Exports

Deemed Exports

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Published by: Amol Dhawle on Dec 01, 2011
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12/01/2011

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IMDR PGDIT

What is Deemed Export?
“Deemed Exports” refers to those transactions in which goods supplied do not leave country, and payment for such supplies is received either in Indian rupees or in free foreign exchange.

Supplies to be made by the main / Subcontractor
Sub-contractor may make supplies to main contractor, instead of supplying directly to designated projects / agencies. Such Supplies shall be eligible for deemed export benefits. Deemed exports benefits can be claimed provided, the subcontractor is indicated either originally or subsequently in the contract, and payment certificate is issued by project authority in the name of sub-contractor

Benefits of Deemed Exports
(a) (b) (c) Advance Authorisation / Advance Authorisation for annual requirement/ DFIA. Deemed Export Drawback. Exemption from terminal excise duty where supplies are made against ICB. In other cases, refund of terminal excise duty will be given. The deemed export benefits viz Duty Drawback, Refund of Terminal Excise duty, etc are available to the Manufacturer Exporter

Deemed Exports Page | 1

hence usually Merchant Exporter are not entitled to these benefits. provided recipient of goods does not avail CENVAT credit / rebate on such goods. o Deemed Export Drawback. o Refund of Terminal Excise Duty. whichever is applicable: o Advance Licence for deemed Export/DFRC. The Domestic manufacturer supplying capital goods to the holders of licenses under EPCG Scheme are eligible for the following benefits. Such supplies will however be eligible for deemed export drawback on customs duty paid on inputs / components. The supplier of goods to EOU/EHTP/STP/BTP Units are entitled to following benefits. provided CENVAT credit facility / rebate has not been availed by applicant. Deemed Exports Page | 2 . o Deemed Export Drawback.IMDR PGDIT only for supply of the goods manufactured in India. o Refund of Terminal Excise Duty. whichever is applicable : o Advance Licence for deemed Export/DFRC. • Supplies will be eligible for deemed export drawback on Central Excise paid on inputs / components. Eligibility for refund of terminal excise duty / drawback • Supply of goods will be eligible for refund of Terminal Excise Duty.

IMDR PGDIT Benefits to Suppliers Supplies made o Against Advance Authorisation / Advance Authorisation for annual requirement / DFIA. (a) / (b) (a) / (b) / (c) (a) / (b) / (c) (a) / (b) / (c) (a) / (b) / (c) (b) and (c) Benefits (a) Procedure to avail benefits An application in ANF 8 shall be made by supplier to RA concerned. Recipient may also claim benefits on production of a suitable disclaimer from supplier along with a self declaration regarding nonavailment of CENVAT credit. Reference Deemed Exports Page | 3 . o Against Advance Release Order (ARO) or Back to Back Letter of Credit issued against Advance Authorisation / DFIA o To EOU / EHTP / STP / BTP o o Supply of capital goods to holders of Authorisations under EPCG Scheme To projects & Supply and installation of goods and equipment (single responsibility of turnkey contracts) to projects o Supply to projects funded by UN agencies o Supply of goods to nuclear power projects through competitive bidding as opposed to ICB.

IMDR PGDIT o Foreign Trade Policy 2004-09 o Handbook of Procedure Deemed Exports Page | 4 .

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