Deemed exports under GST

Deemed exports under GST

As per section 2(39) of CGST Act, deemed exports means such supplies of goods as may be notified under section 147.

Section 147 of the CGST Act

The government may, on recommendations of council, notify certain supplies of goods as deemed exports, where goods supplies do not leave india, and payment for such supplies is received either in Indian rupees or convertible foreign exchange.

Supplies notified as seemed exports under notification 48/2017- Central tax
Following supplies has been notified as deemed exports under the said notification:

  1. Supply of goods by registered person against Advance Authorization.
  2. Supply of capital goods by registered person under EPCG Authorization.
  3. Supply of goods by registered person to EOU.
  4. Supply of gold by bank or public sector undertaking against Advance Authorization.

Deemed Export has not been kept at par with Zero rated supplies as in Zero rated supplies, supply can be made against Bond/LUT or on payment of IGST (in this case supplier has to file the refund application). In case of  deemed exports, if the goods terminates for delivery in the same state then CGST/SGST has to be charged and if terminates for delivery  in different state then IGST need to be charged.

Refund procedure regarding procurement of goods from DTA by EOU:

  1. Due to non-availability of Refund module on the common portal that the refund application of deemed export shall be filed manually.
  2. Refund claim in respect of deemed exports has to be filed on monthly basis in Form GST RFD-01A provided that the refund claim can only be filed after filing the details in GSTR-1 and also a valid return in GSTR-3B has been filed for the last tax period.

Who can file Refund claim application under deemed exports?

As per rule 89 of CGST Rules, the application for refund has to be filed by:

  1. The recipient of deemed export supplies. In this case, the supplier has to give an undertaking that he shall not claim the refund in respect of such supplies.
  2. The supplier of deemed exports supplies in case where the recipient has not availed the input tax credit and furnishes an undertaking that the recipient has not claimed the refund against such supplies.

Documentary evidence required in case refund application is filed by supplier:

  1. Acknowledgement by the jurisdictional tax officer of Advance authorization holder/EPCG authorization holder that the said deemed export supplies has been received by them or in case of EOU, EOU has to give signed copy of tax invoice that the said deemed export supplies have been received by him.
  •  An undertaking by the recipient that he shall not claim refund in respect of such supplies and that no input tax credit on such supplies has been availed by him.
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