Chapter 7 - DEEMED EXPORTS - Foreign Trade Procedure 2015-2020 (From 1-4-2015 to 4-12-17)

CHAPTER 7 DEEMED EXPORTS 7.00 Policy Policy relating to Deemed Exports is given in Chapter-7 of FTP. 7.01 Procedure for claiming Benefits (a) Supplier / Recipient of goods shall submit application for claiming deemed export benefits, in ANF-7A, along with the documents prescribed therein, to the concerned RA. (b) In case of supply of goods to an EOU, claim shall be filled with the concern Development Commissioner. A DTA Unit shall claim benefits from the concerned RA. 7.02 Criteria for claiming Benefits (a) (i) In respect of supply of intermediate goods to Advance Authorisation / DFIA holder, against Invalidation Letter, issued in terms of Paragraph 4.13 of HBP, application to obtain Advance Authorisation for import of duty free inputs shall be made as per procedures given in Chapter 4 of HBP. For supplies against invalidation letter, no TED refund shall be provided because such supplies are exempted from payment of Excise Duty under Excise Notification no 44/2001 dated 26.06.2001, as amended time to time. (ii) In respect of supply of goods to Advance Authorisation / DFIA, against ARO / Back to back L/C, procedure given in Chapter 4 of the HBP shall be followed. TED refund for supplies against ARO / Back to Back Letter of Credit shall be allowed, provided, Excise duty is paid while removing such goods. Duty Drawback shall be allowed on duty paid inputs used in such supplies. (b) In respect of supply of goods to EOU / EHTP / STP / BTP, Advance Authorisation / DFIA can be obtained as per procedure given in the Chapter 4 of HBP. For exemption from payment of Terminal Excise Duty, procedure as per Excise Circular No. 851/9/2007-CX dated 03.05.2007 read with Circular No. 10/2009-Cus. dated 25.02.2009, as amended, shall be followed for removal of goods against CT-3. No TED refund shall be provided for supply of goods to EOU / EHTP / STP / BTP. In case Advance Authorisation is not obtained for import of duty free inputs against such supply, drawback claim for duty paid inputs, used in the resultant product, shall be filed with the DC concerned. A DTA Unit shall claim benefits from the concerned RA. 1 [(c) In respect of supply of goods to an EPCG Authorisation holder, against Invalidation Letter, application for Advance Authorisation / DFIA shall be made as per procedures given in Chapter 4 of HBP . Since supply of goods to an EPCG Authorization holder is not exempted from payment of TED, claim for such TED refund may be made to the RA concerned, as per the invalidation letter. In respect of supply of goods to EPCG Authorisation holder against ARO, issued as per Paragraph 5.08 of HBP, refund of TED shall be allowed. If Advance Authorisation / DFIA is not obtained for duty free inputs, Duty drawback shall be allowed on duty paid inputs used in the resultant product.] (d) In respect of supply of goods to other categories as listed in the Paragraph 7.02 (e), (f), (g) (h) of FTP, Advance Authorisation / DFIA for import of duty free inputs may be obtained against Project Authority Certificate as per Appendix- 7C. However, if Advance Authorisation / DFIA is not obtained against such supplies for duty free inputs, claim for duty drawback may be filed as per ANF-7A. In case supply of goods is made against ICB contract, no TED refund shall be provided because supply against ICB contract is exempted from payment of Excise Duty under Excise Notification No 12/2012-CE dated 17.03.2012. 7.03 Eligibility criteria for claiming TED / Drawback (a) Application can be filed either by supplier or by recipient of goods, having IEC Number. (b) Application can be made by Registered office / Head office / Branch office or Manufacturing unit. (c) In case supplier files claim for TED refund, it shall obtain a certificate for non-availment of CENVAT credit from the recipient of goods as per Annexure - I to ANF-7A and submit the same. In case recipient of goods is an applicant, then the applicant itself shall submit such certificate. (d) In case supplier files claim for Duty Drawback, it shall submit a certificate for non-availment of CENVAT credit as per Annexure II to ANF-7A. In case recipient of goods is an applicant, then it shall obtain such certificate from the supplier and submit the same. (e) In case recipient unit files claim for TED / Duty Drawback, disclaimer certificate as prescribed in the Annexure-III to ANF- 7A shall be obtained from supplier and shall be submitted along with the application. In case supplier of the goods is an applicant then the disclaimer certificate from the recipient of the goods shall be submitted. (f) Claim can be filed only after payment is received in full, to the extent of supplies made. (g) Claim can be filed against payment received through normal banking channel, as per e-BRC. In other words, supply documents have to be negotiated through bank only. In respect of supplies covered under Paragraph 7.02 (e) to (h) of the FTP, payment certificate issued by Project Authority, in APPENDIX-7D, has also to be submitted. (h) Sub-contractor can also file claim provided its name is endorsed in the Project Authority Certificate / Contract before supply of such goods. 7.04 Procedure for claiming TED refund on Fuel For supply of High Speed Diesel (HSD) / Furnace Oil from Depots of domestic oil Public Sector Undertakings under Paragraph 7.02(b) of FTP, terminal excise duty shall be refunded on the basis of duty paid certificate issued by concerned domestic oil Public Sector Undertaking in the format given in Annexure-IV to ANF-7A. Duty refund will be allowed for quantity of HSD / Furnace oil procured by EOU / EHTP / STP / BTP unit for its production activities, as certified by concerned DC / Bond authorities. 7.05 Frequency of application and time period for claiming TED / Drawback (a) In respect of supplies covered in Paragraphs 7.02 (a) to (d) of FTP, application for TED refund / drawback (whichever applicable) may be filed within 12 months from the date of realisation of 100% payment against such supplies. In cases where payment is received in advance and supply is made subsequently, in such cases application can be filed within 12 months from the last date of such supplies. Claim can be filed Invalidation Letter / ARO wise against individual Authorisation within the time limit as specified above. (b) In respect of supplies covered in Paragraphs 7.02 (e) to (h) of FTP, claim may be filed either on the basis of proof of supplies effected or payment received. Claims should be filed within a period of twelve months from date of receipt of supplies by project authority or from date of receipt of the payment by supplier as per the option of applicant, either against a particular project or all the projects. Claims may also be filed where part payments have been received. Deemed export benefits may be allowed after 100% supplies have been made. However, benefit will be limited to the extent of payment received. 7.06 Fixation of Brand Rate Normally, drawback may be allowed as per All Industry Rate fixed by DoR in the Drawback Schedule. An application in ANF- 7A, along with documents prescribed in ANF-7A Appendix-7E , may be made to RA or DC concerned, as the case may be, for fixation of brand rate. Application for fixation of Brand rate may be made for the following: (a) Where All Industry Rate of Drawback is not available or same is less than 4/5th of duties actually paid on raw materials or components used in the production or manufacture of the said goods. (b) Where basic customs duty paid is claimed as brand rate of duty drawback, in terms of Paragraph 7.06(b) of FTP. 7.07 Time barred / supplementary claim In case claim is filed after prescribed time period, provision of late cut, under Paragraph 9.02 of HBP and provision of supplementary claim under Paragraph 9.03 of HBP shall be applicable. 7.08 Exemption from payment of TED For claiming exemption from payment of terminal excise duty, wherever applicable, procedure prescribed by Central Excise Authority shall be followed. 7.09 Applicability of other Rules Subject to procedure laid down in HBP, Customs and Central Excise Duty Drawback Rules, 1995 shall apply mutatis mutandis to deemed exports scheme. 7.10 Payment of interest (a) RA shall make payment within 30 days from the date of issuance of Approval Letter. In case payment is not made within the time period as given above, then RA shall add interest component, along with principal amount, in accordance with Paragraph 7.09 of the FTP. No separate application for claiming interest is required to be made. A single mandate shall be issued to the bank for principal amount and interest. (b) If interest is not added by RA/DC, a separate application, as per ANF-7B may be filed, within 30 days from the date of receipt of principal amount. No interest shall be paid thereafter. RA shall maintain separate account for disbursement of principal amount and interest for accounting purpose. (c) RA shall submit a monthly report regarding disbursement of deemed exports claims, in the proforma as given in Appendix-7F. Wherever interest is paid, RA shall inform the reason for payment of interest. Report shall be sent at the email ID [email protected]. 7.11 Internal Audit Mechanism The zona offices of Additional DGFT shall constitute Audit team in their offices as per Paragraph 7.10 of FTP and shall carry out post Audit. ------------------------ Notes:- 1. Substituted vide PUBLIC NOTICE NO 16/2015-2020 dt. 04th June, 2015 before it was read as, (c) In respect of supply of goods to an EPCG Authorisation holder, against Invalidation Letter, application for Advance Authorisation / DFIA shall be made as per procedures given in Chapter 4 of HBP. In respect of supply of goods to EPCG Authorisation holder against ARO, issued as per Paragraph 5.08 of HBP, refund of TED shall be allowed. If Advance Authorisation / DFIA is not obtained for duty free inputs, Duty drawback shall be allowed on duty paid inputs used in the resultant product.