Deemed Exports refer to those transactions in which goods supplied do not leave country, and payment for such supplies is received either in Indian rupees or in free foreign exchange.
Following categories of supply of goods by main / subcontractors shall be regarded as “Deemed Exports”, provided goods are manufactured in India:
A. Supply of goods against Advance Authorisation / Advance Authorisation for annual requirement / DFIA;
B. Supply of goods to EOU / STP / EHTP / BTP;
C. Supply of capital goods to EPCG Authorisation holders;
D. Supply of goods to projects financed by multilateral or bilateral Agencies / Funds as notified by Department of Economic Affairs (DEA), MoF under International Competitive Bidding (ICB) in accordance with procedures of those Agencies / Funds, where legal agreements provide for tender evaluation without including customs duty; Supply and installation of goods and equipment (single responsibility of turnkey contracts) to projects financed by multilateral or bilateral Agencies / Funds as notified by DEA, MoF under ICB, in accordance with procedures of those Agencies / Funds, which bids may have been invited and evaluated on the basis of Delivered Duty Paid (DDP) prices for goods manufactured abroad;
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 stage of commercial production, and spares to extent of 10% of FOR value to fertilizer plants;
F. Supply of goods to any project or purpose in respect of which the MoF, by a notification, permits import of such goods at zero customs duty;
G. Supply of goods to power projects and refineries not covered in (f) above;
H. Supply of marine freight containers by 100% EOU (Domestic freight containers-manufacturers) provided said containers are exported out of India within 6 months or such further period as permitted by customs;
I. Supply to projects funded by UN Agencies; and
J. Supply of goods to nuclear power projects through competitive bidding as opposed to ICB.
Benefits of deemed exports shall be available under paragraphs (d), (e), (f) and (g) only if the supply is made under procedure of ICB.
Deemed exports shall be eligible for any / all of following benefits in respect of manufacture and supply of goods qualifying as deemed exports subject to terms and conditions :
Advance Authorisation / Advance Authorisation for annual requirement / DFIA.
Deemed Export Drawback.
Exemption from terminal excise duty where supplies are made against ICB.
In other cases, refund of terminal excise duty will be given.
Exemption from TED shall also be available for supplies made by an Advance Authorisation holder to a manufacturer holding another Advance Authorization if such manufacturer, in turn, supplies the product(s) to an ultimate exporter.