Deemed Exports in GST is not like an export made out of India. According to the section 147 of CGST Act, goods supplied under deemed export shall not leave India and payment for such supplies is received either in Indian rupees or in convertible foreign exchange, if such goods are manufactured in India. In GST Deemed Exports shall be applicable only on supply of goods and not on supply of services. It shall be applicable on such supply of goods which have been notified under section 147 of the CGST Act.
The following points shall be discussed under this article:-
A. Notification issued for Supply of Goods to be treated as Deemed Exports
B. Procedure regarding procurement of Supplies of Goods for Deemed Exports Benefits
C. Taxability of Deemed Exports
D. Reporting tables in GSTR-1 and GSTR-3B for Deemed Export
E. Refund Procedure
Page Contents
A. Notification issued for Supply of Goods to be treated as Deemed Exports
Notification No. 48/2017-Central Tax dated 18-10-2017 was issued to notify the following supplies of goods to be treated as deemed exports:
1. Supply of goods by a registered person against Advance Authorisation
2. Supply of capital goods by a registered person against Export Promotion Capital Goods Authorisation
3. Supply of goods by a registered person to Export Oriented Unit
4. Supply of gold by a bank or Public Sector Undertaking specified in the notification No. 50/2017-Customs, dated the 30th June, 2017 (as amended) against Advance Authorisation.
Notification also explained following terms:-
1. “Advance Authorisation”means an authorisation issued by the Director General of Foreign Trade under Chapter 4 of the Foreign Trade Policy 2015-20 for import or domestic procurement of inputs on pre-import basis for physical exports.
2. Export Promotion Capital Goods Authorisation means an authorisation issued by the Director General of Foreign Trade under Chapter 5 of the Foreign Trade Policy 2015-20 for import of capital goods for physical exports.
3. “Export Oriented Unit”means an Export Oriented Unit or Electronic Hardware Technology Park Unit or Software Technology Park Unit or Bio-Technology Park Unit approved in accordance with the provisions of Chapter 6 of the Foreign Trade Policy 2015-20.
B. Procedure regarding procurement of Supplies of Goods for Deemed Exports Benefits
According to the Circular No. 14/14 /2017 – GST dated 06-11-2017:
(i). Form-A shall be made before Deemed Export Supplies. The Form, bearing a running serial number containing the goods to be procured, as pre-approved by the Development Commissioner and the details of the supplier, shall be issued to the :
(a) the registered supplier;
(b) the jurisdictional GST officer in charge of such registered supplier; and
(c) its jurisdictional GST officer.
(ii). The registered supplier thereafter will supply goods under tax invoice to the recipient EOU / EHTP / STP / BTP unit.
(iii) On receipt of such supplies, the EOU / EHTP / STP / BTP unit shall endorse the tax invoice and send a copy of the endorsed tax invoice to –
(a) the registered supplier;
(b) the jurisdictional GST officer in charge of such registered supplier; and
(c) its jurisdictional GST officer.
(iv) The endorsed tax invoice will be considered as proof of deemed export supplies by the registered person to EOU / EHTP / STP / BTP unit.
(v) The recipient EOU / EHTP / STP / BTP unit shall maintain records of such deemed export supplies in digital form, based upon data elements contained in “Form-B”. The software for maintenance of digital records shall incorporate the feature of audit trail. While the data elements contained in the Form-B are mandatory, the recipient units will be free to add or continue with any additional data fields, as per their commercial requirements. All recipient units are required to enter data accurately and immediately upon the goods being received in, utilized by or removed from the said unit. The digital records should be kept updated, accurate, complete and available at the said unit at all times for verification by the proper officer, whenever required. A digital copy of Form – B containing transactions for the month,shall be provided to the jurisdictional GST officer, each month (by the 10th of month) in a CD or Pen drive, as convenient to the said unit.
(vi ) Both Forms “A” and Form “B” are available in Circular No. 14/14 /2017 – GST dated 06-11-2017.
C. Taxability of Deemed Exports
The supply of goods under deemed exports cannot be made without payment of tax and cannot be supplied under a Bond/LUT. Rate of Tax on such supply of goods shall be the same rate of tax as applicable to regular supply of goods. Tax shall be paid on each and every supply under deemed exports and thereafter refund may be claimed.
D. Reporting tables in GSTR-1 and GSTR-3B for Deemed Export
Supply Detail in regard of Deemed Export shall be disclosed in following tables:
(i) Table 3.1 (b) of GSTR-3B and
(ii) Table 6C of GSTR-1
E. Refund Procedure
- Applicants– According to the 3rd proviso to rule 89 of the CGST Rules Applicants shall be –
(a) the recipient of deemed export supplies; or
(b) the supplier of deemed export supplies in cases where the recipient does not avail of input tax credit on such supplies and furnishes an undertaking to the effect that the supplier may claim the refund.
- GST Refund Form– GST-RFD-01
- Statements/Documents to be required with Refund Application–
(a) Statement 5(B) under rule 89(2)(g) (statement proforma given below)
(b) According to notification 49/2017 – Central Tax following documents are required:
1. Acknowledgment by the jurisdictional Tax officer of the Advance Authorisation holder or Export Promotion Capital Goods Authorisation holder, as the case may be, that the said deemed export supplies have been received by the said Advance Authorisation or Export Promotion Capital Goods Authorisation holder, or a copy of the tax invoice under which such supplies have been made by the supplier, duly signed by the recipient Export Oriented Unit that said deemed export supplies have been received by it.
2. An undertaking by the recipient of deemed export supplies that no input tax credit on such supplies has been availed of by him.
3. An undertaking by the recipient of deemed export supplies that he shall not claim the refund in respect of such supplies and the supplier may claim the refund.
(c) Undertakings – If the Recipient claims refund then undertaking by the Recipient shall be – “I hereby declare that the refund has been claimed only for those invoices which have been detailed in statement 5B for the tax period for which refund is being claimed and the amount does not exceed the amount of input tax credit availed in the valid return filed for the said tax period. I also declare that the supplier has not claimed refund with respect to the said supplies.
If the Supplier claims refund then undertaking by the Supplier shall be – “I hereby declare that the refund has been claimed only for those invoices which have been detailed in statement 5B for the tax period for which refund is being claimed. I also declare that the recipient shall not claim any refund with respect of the said supplies and also, the recipient has not availed any input tax credit on such supplies.
(d) According to rule 96 (10) of the CGST Rules, the recipient of deemed export supplies on which the supplier has availed the benefit of notification No. 48/2017-Central Tax dated 18.10.2017 cannot export on payment of integrated tax.
- Time Limit for Refund Claim –
The refund claim can be filed within two years from the date on which return relating to such deemed export supplies is furnished electronically.
- Proforma Statement 5B –
|
[Statement 5B [rule 89(2)(g)] |
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| Refund Type: On account of Deemed Exports Amount in ( Rs.) | |||||||||
| Sl No. | Details of invoices/credit notes/debit notes of outward supplies in case refund is claimed by supplier/Details of invoices of inward supplies in case refund is claimed by recipient. | Tax Paid | |||||||
| GSTIN of the supplier | No. | Date | Taxable Value | Type (In voice/ Credit Note/ Debit Note) | Integrated Tax | Central Tax | State Tax /Union territory Tax | Cess | |
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
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Who will provide the “FORM A” Registered Supplier or EOU unit?