Information about Under CGST Act 2017 Deemed Exports
Under the CGST Act 2017 Deemed Exports- Part 5 of GST Series
- The meaning of deemed exports are such supplies containing goods that are notified under GST Act Section 47.
- Statutory Provisions
| Section 2 (39) | The supplies of goods that are notified under Secion 147 are deemed exports |
| Section 147 | Whenever goods supplies does not leave India and payment is gained either in Indian rupee or convertible foreign exchange these certain export of goods may be termed as deemed transport in case the goods are manufactured in India |
- Deemed Exports Features
- Deemed Exports cannot be termed as Zero-rated supply.
- It is applicable only on goods supply and not on the services given.
- There is no need to take the goods outside India
- As Deemed Exports such goods supply may be termed by the Government
- Goods must be made in India
- Payment must be received in Indian Rupee or convertible Foreign Exchange
4. Notified Category
The Government vides Notification No. 48/2017-CT dated 18-10-2017 has announced the following category of goods supply as Deemed Export :
(a) Supply of goods against Advance Authorization by a registered Individual.
(b)Against Export Promotion Capital Goods (EPCG) Authorization Offer of capital goods by a registered person
(c) Offer of products by a registered person to Export orientated Unit (EOU)
(d) Offer of gold by a bank or Public Sector endeavor per the notification No. 50/2017-Customs, dated the 30th June 2017 (as amended) against Advance Authorization
5. ADVANCE AUTHORIZATION:
Advance Authorization suggests that the authorization issued by the Director-General of Foreign Trade for import or domestic procurer for physical exports.
5.1 Before 15-1-2019, there was a condition of pre-import i.e. inputs were needed to be procured or domestically procured before physical exports.
5.2 This condition has been omitted w.e.f. 15-1-2019. Now, the condition is that provided goods against advanced authorization shall be utilized in the manufacture and provide of taxable goods(other than 0 rated or totally exempted goods)
5.3 A certificate to the present result from a controller ought to be submitted to the Jurisdictional GST commissioner in 6 months of such offer.
5.4 Such certificate shall not be needed if input tax crediting has not been availed on inputs utilized in the manufacture of export quality goods
.6. EXPORT PROMOTION CAPITAL GOODS AUTHORISATION (EPCG)
Export Promotion Capital Goods Authorization is the term that describes an authorization issued by the Director-General of Foreign Trade for the purpose of physical export for the import of capital goods .
7. EXPORT ORIENTED UNITS (EOU)
Export Oriented Unit (EOU) Scheme was firstly introduced in the year 1981. Under EOU scheme, units registered as EOU have to export their entire production of goods and services. However, within the domestic Tariff Area (DTA) a certain portion is allowed to be sold
. 8. REFUND:
On the deemed Exported goods, Section 54 of CGST Act prescribes the provision for refund of tax
| Section 54 Explanation 1 | “Refund” is the term that refers a tax refund o goods supply regarded already as deemed export |
| Third Provision to section 89(1) | In references of supplies regarded as deemed exports, the refund application may be filed by Deemed export supplies recipientDeemed Export Supplies suppliers |
Supplier Refund Claim
| A refund claim can be filed by supplier of deemed exports in case, input tax credit is not availed by The recipient and he may furnish an undertaking to the effect so that supplier may claim the refund |
| LUT mode for refund cannot be opted by supplier of deemed export. IGST on deemed export has to be claimed by him |
| Rule If the benefits of deemed export has been claimed by the supplier, and the recipient of such supplies get the zero-rated supplies. In respect of other input and output services such Recipient has a n eligibility to claim income tax refund. However, for such recipient, on payment of IGST the export of goods is not permissible If IGST is not paid still on goods or services export, The income tax credit is not available for it 89(4A) Rule 96(10) |
9.1 ILLUSTRATION
| The goods are supplied by Mr. X to | Mr Y who is authorized under AA scheme |
| Thus supply is a deemed export and is not a zero rated supply. | |
| At the time of supply GST must be paid | Under LUT/Bond the supply cannot be made |
| Either Mr. X or Mr. Y can claim a refund | |
| Mr. X when refunds the claim as | The zero rated supply is made by Mr. Y |
| To claim a refund of ITC availed in respect of other specified goods and services Mr. Y is now eligible to make a refund | |
| Under LUT/ Bond these goods shall be exported by Mr. Y IGST route is not allowed |
9.2 PROOF NEEDED FOR REFUND CLAIM BY PROVIDER (MR X ):
Following proof is needed to be made whereas filing refund application in respect of ‘deemed exports’ as nominal vide Notification No. 48/2017-CT dated 18-10-2017:-
(a) Acknowledgement by Jurisdictional Tax Officer of Mr.. Y (AA holder) that deemed export provides are received or a duplicate of tax invoice by Mr. X punctually signed by Mr. Y that such offer has received by him.
(b) Endeavor by Mr.
. Y that he has not availed ITC on such offer (c) Endeavor by Mr. Y that he shall not claim the refund
9.3 REFUND CLAIM BY THE RECIPIENT
If the recipient of deemed exports has paid the tax quantity on inward provides received that is qualified as deemed exports, he will claim a refund of the tax quantity paid by providing a declaration that the provider has neither claimed nor shall claim any refund for the same provides.
10. Relevant Date
| Explanation 2(b) to section 54 | In case of supply of goods as deemed export the “Relevent Date” for refund of claim is the exact date on which returns for such deemed exports are filed Within 2 years of furnishing the returns relating to deemed exports the refund claim needs to be filed |
11. CLAIM FORM:
The payer shall file the refund application in type RFD-01 on the GST portal.
12. Procedure to be followed for refund claim just in case of deemed exports has been elaborate within the list on GST Chapter 14 Q No. 76 issued by CBI&C on 15-12-2018.
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