Meaning of Deemed exports

What is deemed exports in export import policy


Deemed Exports

This post explains about Meaning of Deemed exports. what are the benefits of deemed exports.  

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.

‘Deemed Exports’ as defined in the Export and Import Polilcy, 1997-2002 means those transactions in which the goods supplied do not leave the country and the supplier in India receives the payment for the goods.  It means the goods supplied need not go out of India to treat them as ‘Deemed Export’.

"Deemed Exports" refers to those transactions in which the goods supplied do not leave the country and the payment for such supplies is received either in Indian rupees or in free foreign exchange.

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:

  1. Supply of goods against Advance Licence/Advance Licence for annual requirement/DFRC under the Duty Exemption /Remission Scheme;
  2. Supply of goods to Export Oriented Units (EOUs) or Software Technology Parks (STPs) or Electronic Hardware Technology Parks (EHTPs) or Bio Technology Parks (BTP);
  3. Supply of capital goods to holders of licences under the Export Promotion Capital Goods (EPCG) scheme;
  4. 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;
  5. 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 fertiliser plants.
  6. 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 .
  7. Supply of goods to the power projects and refineries not covered in (f) above.
  8. 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; and
  9. Supply to projects funded by UN agencies.
  10. Supply of goods to nuclear power projects through competitive bidding as opposed to International Competitive Bidding.

Benefits for Deemed Exports

  1. Deemed exports shall be eligible for any/all of the following benefits in respect of manufacture and supply of goods qualifying as deemed exports.
  2. Advance Licence for intermediate supply/ deemed export/DFRC/ DFRC for intermediate supplies.
  3. Deemed Export Drawback.
  4. Exemption from terminal excise duty where supplies are made against International Competitive Bidding. In other cases , refund of terminal excise duty will be given.

The information on deemed exports is detailed above.   Comment below your thoughts on deemed exports



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MAYA RAM: Goods purchased for power sector in Sikkim from India on 29.01.2014 and as per contract payment of EURO was made on 31.03.3017based on all the docs submitted as Invoice, Lorry Receipt,Packing list LOA, CA certificate for material used and accounted for in the books. Now AD is asking for Bill of Entry. How is it posiible since material is not crossed the border, how BoE will be generated. Pls. guide someone

C.K.BALA: Bonded warehouse to EOU billing , we would like to know if we can invoice in any currency or INR only. If so under which rule of customs.



Jagdish Bhatia: I would like to know about RBI guidlines on this. Exporter supplies goods domestically and receives payment from foreign party. Local material receiver exports goods. So actual supplier how can he show against what he received this payment. and on other hand how second receipient justify non receipt of payment against shipping bill

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