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TMI BlogUnderstanding Deemed Exports: A Comprehensive OverviewX X X X Extracts X X X X X X X X Extracts X X X X ..... Understanding Deemed Exports: A Comprehensive Overview - By: - raghunandhaanan rvi - Customs - Import - Export - SEZ - Dated:- 25-10-2024 - 1. Introduction to Deemed Exports Deemed Exports refer to transactions in which goods supplied within a country are treated as exports, even though they do not physically leave the country. This concept is integral to India's Foreign Trade Policy (FTP), w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here the supplied goods are manufactured locally but sold to domestic projects or entities for domestic or international purposes. Payment for these transactions can be made in Indian rupees or foreign exchange. The details and procedures are available in Chapter 7 of the Foreign Trade Policy and Handbook Procedures on the DGFT website. 2. Classification of Deemed Exports There are several categor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies under which transactions are recognized as deemed exports: Supply by Manufacturer : Goods supplied against Advance Authorizations to Export Oriented Units (EOUs), Software Technology Parks (STPs), Electronic Hardware Technology Parks (EHTPs), Bio-Technology Parks (BTPs), and capital goods under Export Promotion Capital Goods (EPCG) authorization. Supply by Contractors : Involves the supply and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... installation of equipment for projects funded by international agencies or bilateral/multilateral funds. International Competitive Bidding (ICB) : Deemed export benefits can be extended if goods are supplied under the ICB procedure for government-approved projects or zero-duty imports. 3. Eligibility Criteria for Deemed Exports Specific industries, including mega power and nuclear projects, can e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtend deemed export benefits if they meet specific criteria such as production capacity thresholds or regulatory approval. Supplies to the United Nations or approved international organizations are also eligible. 4. Benefits of Deemed Exports Businesses engaged in deemed exports can avail themselves of several advantages, including: Advance Authorizations : Companies can import inputs for manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring without paying duties, reducing production costs. Deemed Export Drawback: For such supplies, a refund of the duties paid on inputs, at either the All Industry Rate or a Brand Rate, can be claimed. Refund of Terminal Excise Duty (TED) : Businesses can apply for a TED refund for excisable goods if the goods supplied meet the deemed export criteria. 5. Procedure for Claiming Deemed Export Benef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its To claim benefits, trades must submit the following: Application in ANF-7A form : This form must be submitted to the relevant authority for deemed export benefits. Supporting Documents include certifications from project authorities or tender certificates for International Competitive Bidding. TED Refunds: Special procedures apply to fuel supplies such as High-Speed Diesel (HSD), where public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sector oil undertakings must issue duty-paid certificates. 6. Application Timeline and Criteria TED/Drawback Claim Period : Businesses must file applications within 12 months of realizing full payment or from the last date of supply in advance payment cases. Claims are subject to full supply completion and payment realization. 7. Advantages of Deemed Exports Boosting Domestic Industry : By treatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g domestic supplies as exports, the policy supports local industries, creates jobs, and contributes to economic growth. Incentivizing Specific Sectors: Governments can use deemed export policies to target strategic sectors such as energy, defence, and technology, promoting self-sufficiency. 8. Disadvantages in Deemed Exports Limited Eligibility : Not all industries or products qualify for deemed e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xport benefits, potentially limiting the scope of their economic impact. Indirect Revenue : Deemed exports do not directly contribute to foreign exchange earnings, as the goods remain within national borders, unlike physical exports. 9. Conclusion Deemed Exports are crucial in stimulating domestic production and supporting key industries. However, the effectiveness of these policies depends on cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arly defined criteria and transparent processes. As the policy evolves, its capacity to balance domestic economic benefits with global competitiveness will determine its long-term success. This article highlights the significance of Deemed Exports in India s economic landscape, addressing both opportunities and challenges faced by businesses operating under this framework. Disclaimer: The informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion provided is for general informational purposes only and should not be considered professional advice. Always seek professional advice for specific situations. - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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