| Deemed Exports |
8.1 |
“Deemed Exports” refers 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. |
| Categories of Supply |
8.2 |
Following categories of supply of goods by main /
sub-contractors shall be regarded as “Deemed Exports” under FTP, provided goods
are manufactured in India:
- Supply of goods against Advance Authorisation / Advance Authorisation for annual requirement / DFIA;
- Supply of goods to EOUs or STPs or EHTPs or BTPs;
- Supply of capital goods to holders of Authorisations under
EPCG Scheme;
- 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;
- 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;
- 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;
- Supply of goods to power projects and refineries not covered in (f) above;
- 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;
- 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.
|
| Benefits for |
8.3 |
Deemed exports shall be eligible for any / all of following
benefits in
Deemed Exports respect of manufacture and supply of goods qualifying as deemed
exports subject to terms and conditions as in HBP v1:-
- 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.
|
| Benefits to |
8.4.1 |
- n respect of supplies made against Advance
the Supplier Authorisation / DFIA in terms of paragraph 8.2(a) of FTP, supplier
shall be entitled to Advance Authorisation / DFIA
for intermediate supplies.
- If supplies are made against Advance Release Order (ARO) or Back to Back
Letter of Credit issued against Advance Authorisation / DFIA in terms of
paragraphs 4.1.11 and
4.1.12 of FTP, suppliers shall be entitled to benefits listed in
paragraphs 8.3(b) and (c) of FTP, wherever is applicable.
- Deleted.
|
|
8.4.2 |
In respect of supply of goods to EOU / EHTP / STP / BTP in terms
of paragraph 8.2(b) of FTP, supplier shall be entitled to benefits listed in
paragraphs 8.3(a), (b) and (c) of FTP, whichever is applicable. |
| 8.4.3 |
In respect of supplies made under paragraph 8.2(c) of FTP, supplier shall
be entitled to the benefits listed in paragraphs 8.3(a), (b) and
(c) of the Policy, whichever is applicable. |
| 8.4.4 |
- In respect of supplies made under paragraphs 8.2(d), (f) and (g) of
FTP, supplier shall be entitled to benefits listed in paragraphs 8.3(a), (b) and
(c), whichever is applicable.
- In respect of supplies mentioned in paragraph 8.2(d), supplies to projects
funded by such agencies alone, as may be notified by DEA, MoF, shall be eligible
for deemed export benefits. A list of such agencies/funds is given in Appendix
13 of
HBP v1.
- Benefits of deemed exports under para 8.2(f) of FTP shall be applicable in
respect of items, import of which is allowed
by DoR at zero customs duty subject to fulfillment of
conditions specified under Notification No. 21/2002- Customs dated 1.3.2002, as
amended from time to time.
- Supply of Capital goods and spares upto 10% of FOR value of capital goods
to power projects in terms of paragraph
8.2(g), shall be entitled for deemed export benefits provided the ICB procedures
have been followed at Independent Power Producer (IPP) / Engineering and
Procurement Contract (EPC) stage. Benefit of deemed exports shall also be
available for renovation / modernization of power plants. Supplier shall be
eligible for benefits listed in paragraph 8.3(a) and (b) of FTP, whichever is
applicable. However, supply of goods required for setting up of any mega power
projects as specified in S.No. 400 of DoR Notification No. 21/2002- Customs
dated 1.3.2002, as amended, shall be eligible for deemed exports benefits as
mentioned in paragraph 8.3(a),
(b) and (c) of FTP, whichever is applicable, if such mega
power project is :
- an inter state Thermal Power Plant of capacity of
1000MW or more; or
- an inter state Hydel Power Plant of capacity of 500 MW or more.
- Supplies under paragraph 8.2(g) of FTP to new refineries being set up during
Ninth Plan period and spilled over to Tenth Plan period, shall be entitled for
deemed export benefits in respect of goods mentioned in list 17 specified in
S.No.
228 of Notification No. 21/2002-Customs dated 1.3.2002, as amended from time to
time. Supplier shall be eligible for benefits listed in paragraphs 8.3(a) and
(b) of FTP, whichever
is applicable.
|
| 8.4.5 |
In respect of supplies made under paragraph 8.2(e) of FTP, supplier shall
be eligible for benefits listed in paragraph 8.3(a) and (b) of FTP , whichever
is applicable. Benefit of deemed exports shall be available in respect of
supplies of capital goods and spares to Fertilizer Plants which are set up or
expanded / revamped / retrofitted / modernized during Ninth Plan period. Benefit
of deemed exports shall also be available on supplies made to Fertilizers
Plants, which have started in the 8th / 9th Plan periods and spilled over to
10th Plan period. |
| 8.4.6 |
Supplies of goods to projects funded by UN agencies covered under para
8.2(i) of FTP are eligible for benefits listed in paragraph 8.3(a) and (b) of
FTP, whichever is applicable. |
| 8.4.7 |
In respect of supplies made to Nuclear Power Projects under para
8.2(j) of FTP, the supplier would be eligible for benefits given in
para 8.3(a), (b) and (c) of FTP , whichever is applicable. Supply of
only those goods required for setting up any Nuclear Power Project
specified in list 43 at S.No. 401 of Notification No. 21/2002-
Customs dated 1.3.2002, as amended from time to time having a
capacity of 440MW or more as certified by an officer not below
rank of Joint Secretary to Government of India in Department of
Atomic Energy, shall be entitled for deemed exports benefits in cases
where procedure of competitive bidding (and not ICB ) has been
followed. |
| Eligibility for |
8.5 |
Supply of goods will be eligible for refund of Terminal
Excise Duty
refund of terminal in terms of para 8.3(c) of FTP provided recipient of goods
does not
excise duty / avail CENVAT credit / rebate on such goods. Similarly, supplies
will
drawback be eligible for deemed export drawback in terms of para 8.3(b) of
FTP on Central Excise paid on inputs / components, provided
CENVAT credit facility / rebate has not been availed by applicant.
Such supplies will however be eligible for deemed export drawback
on customs duty paid on inputs / components. |
|
8.5.1 |
Simple interest @ 6% per annum will be payable on delay in refund
of Duty Drawback and Terminal Excise Duty under deemed export
scheme in respect of reimbursements/refunds that have become due
on or after 01.04.2007 but which have not been settled within 30
days of its final approval for payment by the Regional Authorities of DGFT organization. |
| |
8.5.2 |
For the applications of Duty Drawback and Terminal Excise Duty
refund submitted on or after 06.08.2008, the period of 30 days will be
counted from the date of receipt of complete application as provided in
Paragraph 9.10.1 of HBP Vol I 2004-09 (updated as on 11.04.2008) and
interest will be payable if the case is not settled within 30 days of
receipt of complete application. (This para added by
DGFT Notification No. 29(RE-2008)/2004-2009, Dated 6th August, 2008) |
| Supplies to be |
8.6.1 |
In all cases of deemed exports, supplies shall be made
directly to
made by the designated Projects / Agencies / Units / Advance Authorisation /
main / sub- EPCG Authorisation holders. Sub-contractor may, however,
contractor make supplies to main contractor, instead of supplying directly to
designated projects / agencies. Such Supplies shall be eligible for
deemed export benefits as per procedure laid down in paragraph
8.4 of HBP v1. |
|
8.6.2 |
Supplies made by an Indian sub-contractor of an Indian or foreign
main contractor directly to the designated projects / agencies, shall
also be eligible for deemed export benefits provided sub-contractor
is indicated either originally or subsequently in the contract, and
payment certificate is issued by project authority in the name of
sub-contractor as in Appendix 22C of HBP v1. |