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Deemed Export Under GST
When we talk about exports under GST, we have to understand the laws and regulations applicable to the import and export of both services and goods. In this article, we will provide you the details of these laws to help you in your business.
As per sec2(5) of IGST Act, 2017– “Export of Goods”, with its grammatical variations and cognate expressions, means taking out of India to a place outside India.
But when we talk about Deemed export – According to sec 2(39) of CGST ACT,2017 it meanssuch supplies of goods as may be notified under section 147.
As per Section 147 of CGST Act 2017, The Government may, on the recommendations of the Council, notify certain supplies of goods as deemed exports, where goods supplied do not leave India, and payment for such supplies is received either in Indian rupees or in convertible foreign exchange, if such goods are manufactured in India. On the other hand –
Zero rated supplies are defined in IGST Act 2017 under Section 16(1) means any of the following supplies of goods or services or both namely:
- a) export of goods or services; or
- b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit.
It is cleared from the above definition that Deemed exports are not covered in zero rated supplies under GST. Therefore, all supplies will be subject to taxes.
Note No. 48/2017-Central Tax :- In exercise of the powers conferred by sec 147 of the central Goods and Services Tax ACT, 2017, the Central Government, on the recommendations of the council hereby notifies the supplies of goods as Deemed exports, namely.
|Description of Supply
||Supply of goods by a registered person against Advance Authorization.
||Supply of capital goods by a registered person against Export Promotion Capital Goods Authorization.
||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 Authorization.
For the purpose of above Notifications,
- Export Oriented Unit means an ExportOriented Unit or Electronic Hardware Technology Park Unit or Software Technology Park Unit or Bio-Technology Park Unit.
- Advance Authorization means an Authorization 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.
- Export Promotion Capital Goods Authorization means an Authorization 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.
However tax paid on such supplies can be claim by way of refund by following the procedure mentioned in the Act.