GST Deemed Export

GST Deemed Export

What Is Deemed Export?

“Deemed export” refers to the shipment of industrial products in India declared as deemed export under section 147 of the 2017 CGST / SGST Act. it’s to be noted that services don’t seem to be considered deemed exports.

The supplies don’t leave India. The payment for such supplies is received either in Indian rupees or in convertible interchange.

Tax Treatment

Regular export are zero-rated supplies i.e no GST is applicable and also GST acquired exports are allowed as a refund. But deemed exports aren’t zero-rated supplies and thus GST is to be paid on them. Then what’s going to be the meaning of considering it as deemed export? within the case of deemed exports, although GST is payable, the tax paid may be claimed as a refund either by the supplier or by the recipient.

Categories of supply of products notified as deemed exports

Notice No. 48/2017 Central Tax, issued October 18, 2017, defines categories that are considered fictitious exports.:-

  • Supply of products by a registered person against Advance Authorization
  • Supply of capital goods of Persons registered against a Capital Goods Export Promotion License
  • Supply of products by a registered person to Export Oriented Unit
  • Delivery of gold by banks or public sector enterprises by Notice No. 50/2017 Customs.

Who Can File A Refund Application Just In Case Of Deemed Exports Supplies

Application for the refund just in case of deemed exports can either be filed by the recipient of deemed export supplies or also can be filed by the supplier. If a supplier wants to file for the refund then he has to get an undertaking from the recipient that he has not availed the input step-down on such supplies and the supplier can take the refund.

If the supplier has taken the refund then the recipient can claim the refund of input diminution availed in respect of input and input services utilized in making the zero-rated supply of products or services or both.

Further rule 96(9) of CGST rules provides that recipients of services cannot export on payment of integrated tax when the refund is claimed by the supplier.

Time Limit For  Filing A Refund Claim

GST Deemed Export

Application in Form GST RFD-01is to be filed within 2 years from the date on which return regarding such deemed export supplies is furnished. a press release containing the quantity and details of invoices is to be furnished together with Form GST RFD-01.

The Procedure Is Just In Case Of Supplies To EOU/EHTP/STP/BTP Units

  • Recipient EOU/EHTP/STP/BTP must give advance notice in a highly prescribed form on “Form-A” (attached to this document) with the current serial number containing the purchased product, pre-approved by the Event Commissioner. , hence the details of the supplier before such intended export. The said intimation shall tend to –
  • the registered supplier
  • the jurisdictional GST officer to blame for such registered supplier
  • it’s a jurisdictional GST officer.
  • After that, the registered supplier ships the goods to the recipient EOU/EHTP/STP/BTP for a tax invoice.
  • On receipt of such supplies, the EOU / EHTP / STP / BTP unit shall endorse the tax invoice and send a replica of the endorsed tax invoice to –
  • the registered supplier
  • the jurisdictional GST officer answerable to such registered supplier
  • it’s a jurisdictional GST officer.
  • The endorsed tax invoice is considered as proof of deemed export supplies by the registered person to EOU / EHTP / STP / BTP unit.
  • The recipient EOU / EHTP / STP / BTP unit shall maintain records of such deemed export supplies in digital form, based upon data elements contained in “Form-B” (appended herewith). The software for the maintenance of digital records shall incorporate the feature of the audit trail. While the information elements contained within Form-B are mandatory, the recipient units are going to be absolved to add or continue with any additional data fields, as per their commercial requirements. All recipient units are required to enter data accurately and immediately upon the products being received in, utilized by, or off from the said unit.

The digital records should be kept updated, accurate, complete, and available at the said unit at the least times for verification by the correct officer, whenever required. A digital copy of Form – B containing the monthly transaction must be provided to the  GST officer monthly (by the 10th of the month) on a CD or flash drive for the convenience of the designated department.

foreign policy 2015-20 Added the above procedures and guarantees to the conditions that EOU/EHTP/STP/BTP units must comply with and therefore the duty exemption notification being availed by such unit.