Deemed Export under GST – All Details and Latest Notification by CBEC

Deemed Export under GST: India offers a well-structured tax system for its population. Taxes are the largest source of income for the Government. This money is deployed for various purposes and projects for the development of the nation. Recently CBEC issued new notification regarding Deemed Export, check complete details from below….

What are deemed export?

Deemed exports refer to supplies wherein the goods do not actually leave India but the supplies are designated as exports. What kinds of supplies are designated as deemed exports?

  • Supply of goods by a registered person against Advance Authorisation;
  • Supply of capital goods by a registered person against Export Promotion Capital Goods Authorisation;
  • Supply of goods by a registered person to Export Oriented Unit;
  • Supply of gold by a bank or Public? Sector Undertaking specified in the notification No. 50/2017? Customs, dated the 30th June 2017 (as amended) against Advance Authorisation

What kinds of supplies are designated as deemed exports?

Supply of goods by a registered person against Advance Authorisation; Supply of capital goods by a registered person against Export Promotion Capital Goods Authorisation; Supply of goods by a registered person to Export Oriented Unit; Supply of gold by a bank or Public‐Sector Undertaking specified in the notification No. 50/2017‐Customs, dated the 30th June 2017 (as amended) against Advance Authorisation

What are the benefits provided for such deemed exports?

Refunds are allowed of the GST paid on deemed exports. Typically, such refund is to be filed in RFD01 by the recipient of the supply.

However, supplier can also file the refund provided:

  • recipient does not avail of input tax credit on such supplies; and
  • recipient furnishes an undertaking to the effect that the supplier may claim the refund. Supplies qualifying as deemed exports

What are the prescribed documents / evidences required for filing the refund claim by a supplier?

For Supplies against Advance Authorisation and EPCG Scheme:

Acknowledgment from jurisdictional officer of Advance Authorisation holder or EPCG holder that deemed export supplies have been received. For Supplies against EOU Scheme: Duly endorsed tax invoice (under which supply was made) by EOU recipient that supplies have been received; For All deemed export supplies

For Supplies against EOU Scheme: Duly endorsed tax invoice (under which supply was made) by EOU recipient that supplies have been received;

For All deemed export supplies:

  • Undertaking from recipient that no input tax credit on such supplies have been availed by it;
  • Undertaking from recipient that it will not seek refund in respect of such supplies and the supplier may claim the refund particulars remarks

What are kind of exemption has been granted?

Outright exemption has been granted from levy of CGST, UGST and IGST.

What the conditions attached?

Such a supply should be under a programme duly approved by the Central Government or any State Government;

Supplier of such foods preparations produces a certificate obtained from deputy secretary of CG/SG/UT to the effect that preparations have been distributed free to EWS section, within 5 months (such extended time) from the date of such supply

Invoicing for Movement of Goods on Approval Basis

Government has clarified that registered persons can take the challan route to transport the goods within the State or outside the State in relation to supply of goods on approval basis. It is clarified that person will first issue the challan and as soon as the supply if fructified, it will issue a tax invoice charging appropriate GST.

It may be note that the clarification relates to goods on approval basis. Thus, the fact pattern needs to be analysed carefully before taking the benefit of this Circular.

Official Notifications

Seeks to notify certain supplies as deemed exports under section 147 of the CGST Act, 2017 .

G.S.R. (E).- In exercise of the powers conferred by section 147 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby notifies the supplies of goods listed in column (2) of the Table below as deemed exports, namely:-

S.No. Description of supply
1 Supply of goods by a registered person against Advance Authorisation
2 Supply of capital goods by a registered person against Export Promotion Capital Goods Authorisation
3 Supply of goods by a registered person to Export Oriented Unit
4 Supply of gold by a bank or Public Sector Undertaking specified in the notification No. 50/2017-Customs, dated the 30th June, 2017 (as amended) against Advance Authorisation.

Explanation – For the purposes of this notification, –

  1. “Advance Authorisation” means an authorisation issued by the Director General of Foreign Trade under Chapter 4 of the Foreign Trade Policy 2015-20 for import or domestic procurement of inputs on pre-import basis for physical exports.
  2. Export Promotion Capital Goods Authorisation means an authorisation issued by the Director General of Foreign Trade under Chapter 5 of the Foreign Trade Policy 2015- 20 for import of capital goods for physical exports.
  3. “Export Oriented Unit” means an Export Oriented Unit or Electronic Hardware Technology Park Unit or Software Technology Park Unit or Bio-Technology Park Unit approved in accordance with the provisions of Chapter 6 of the Foreign Trade Policy 2015-20

[F.No. 349/58/2017-GST(Pt)]

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Seeks to notify the evidences required to be produced by the supplier of deemed export supplies for claiming refund under rule 89(2)(g) of the CGST rules, 2017..

G.S.R. (E).- In exercise of the powers conferred by clause (g) of sub-rule (2) of rule 89 of the Central Goods and Services Tax Rules, 2017 read with notification No. 48/2017-Central Tax, dated the 18th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 1305 (E), dated the 18th October, 2017, the Central Government hereby notifies the following, as detailed in column (2) of the Table below, as evidences which are required to be produced by the supplier of deemed export supplies for claiming refund, namely:-

S.No  Evidence
1 Acknowledgment by the jurisdictional Tax officer of the Advance Authorisation holder or Export Promotion Capital Goods Authorisation holder, as the case may be, that the said deemed export supplies have been received by the said Advance Authorisation or Export Promotion Capital Goods Authorisation holder, or a copy of the tax invoice under which such supplies have been made by the supplier, duly signed by the recipient Export Oriented Unit that said deemed export supplies have been received by it.
2 An undertaking by the recipient of deemed export supplies that no input tax credit on such supplies has been availed of by him.
3 An undertaking by the recipient of deemed export supplies that he shall not claim the refund in respect of such supplies and the supplier may claim the refund.

[F.No. 349/58/2017-GST(Pt)]

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