| 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
- 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 Deemed
Exports |
8.3 |
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 as
in HBP v1.
- [Deleted- Supply of goods against ] Advance Authorisation /
Advance Authorisation for annual requirement / DFIA.
[Old - Supply of goods against Advance Authorisation / Advance Authorisation for
annual requirement / DFIA.]
(In Sub Para (a) the words "Supply of goods against" has
been deleted by
DGFT NOTIFICATION No.:19/2007 Dated:30-07-2007).
- 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 the
Supplier |
8.4.1 |
- In respect of supplies made against Advance
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.
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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.
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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 Poject 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 refund
of Terminal Excise
Duty / Drawback |
8.5 |
Supply of goods will be eligible for refund of Terminal Excise Duty in terms of para 8.3(c) FTP provided recipient of goods does not avail
CENVAT credit / rebate on such goods. Similarly, supplies will 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 |
Interest would be payable on delay in refund of Terminal Excise Duty / Drawback, as notified. |
Supplies to be made
by the main / sub- contractor |
8.6.1 |
In all cases of deemed exports, supplies shall be made directly
to designated Projects / Agencies / Units / Advance Authorisation / EPCG
Authorisation holders. Sub-contractor may, however, 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. |