Deemed Exports Scheme

Every licensed exporter in India does not aspire to export ingenious goods to a foreign land. However, they do wish to receive the benefits enlisted for exporters who transport their goods abroad. This is where the Deemed Exports Scheme comes into the picture.

Overview:

The Deemed Exports Scheme aims to create a level playing field for the domestic industry vis-à-vis direct import by providing duty free inputs or exemption/refund of duty paid on goods manufactured in India.

Benefits:

How does an exporter benefit from this scheme?

An exporter can benefit from this scheme in the following ways:

  • Advance authorisation for annual requirement/DFIA Deemed Export Drawback
  • Exemption from terminal excise duty where supplies are made against ICB

Eligibility Criteria:

What is the eligibility criteria for this scheme?

All the licensed exporters* are eligible for this scheme.

*The following categories of supply of goods by the main/ sub-contractors shall be regarded as “Deemed Exports” under this Policy, provided the goods are manufactured in India:

(a) Supply of goods against Advance Licence / Advance Licence for annual requirement/DFRC under the Duty Exemption /Remission Scheme;

(b) Supply of goods to Export Oriented Units (EOUs) or Software Technology Parks (STPs) or Electronic Hardware Technology Parks (EHTPs) or Bio Technology Parks (BTP);

(c) Supply of capital goods to holders of licences under the Export Promotion Capital Goods (EPCG) scheme;

(d) Supply of goods to projects financed by multilateral or bilateral agencies/funds as notified by the Department of Economic Affairs, Ministry of Finance under International Competitive Bidding in accordance with the procedures of those agencies/ funds, where the legal agreements provide for tender evaluation without including the customs duty;

(e) Supply of capital goods, including in unassembled/ disassembled condition as well as plants, machinery, accessories, tools, dies and such goods which are used for installation purposes till the stage of commercial production and spares to the extent of 10% of the FOR value to fertilizer plants;

(f) Supply of goods to any project or purpose in respect of which the Ministry of Finance, by a notification, permits the import of such goods at zero customs duty;

(g) Supply of goods to the power projects and refineries not covered in (f) above;

(h) Supply of marine freight containers by 100% EOU (Domestic freight containers-manufacturers) provided the said containers are exported out of India within 6 months or such further period as permitted by the customs;

(i) Supply to projects funded by UN agencies; and

(j) Supply of goods to nuclear power projects through competitive bidding as opposed to International Competitive Bidding.

Eligibility for refund of terminal excise duty/drawback:

  • The recipient of the goods does not avail CENVAT credit or rebate on goods.
  • If the CENVAT credit facility/rebate has not been availed by the applicant these supplies will however be eligible for deemed export drawback on the customs duty paid on the inputs/components.

Application:

How can an SME body apply for this scheme?

An SME body can apply for this scheme by clicking here

Documents Required:

What documents are required to apply for this scheme?

Click here to know about the documents required.

For further details on this scheme, click here.

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