Notes on Deemed Exports

By | June 5, 2017

Deemed Exports‘ refers to those transactions in which the goods supplied do not leave the country and the payment for such supplies in received either in Indian rupees or free foreign exchange.

The following categories of supply of goods by the main/sub-contractors shall be registered as “Deemed Exports” under this policy provided the goods are manufactured in India:

  1. Supply of goods against Advance Licence /Advance license for annual requirements/ Duty-Free Replenishment Certificate (DFRC) under the Duty Exemption of Remission Scheme;
  2. Supply of goods to Export Oriented Units (EOUs) or Software Technology Parks (STPs) or Electronic Hardware Technology Parks (EHTPs) or Bio Technology Parks (BTP);
  3. Supply of capital goods to holders of license under the Export Promotion Capital Goods (EPCG) scheme;
  4. Supply of goods to projects financed by multilateral or bilateral agencies or Funds as notified by the Department of Economic Affairs, Ministry of Finance under International Competitive Bidding by procedures of those agencies or funds, where the legal agreements provide for tender evaluation without including the customs duty;
  5. Supply of Capital goods, included in unassembled/disassembled condition as well as plants, machinery, accessories, tools, dies and such goods which are used for installation purposes till the stage of commercial production and spares to the extent of 10 percent of the FOR value to fertilizer plants;
  6. Supply of goods to any project or purpose in respect of which the Ministry of Finance, by notification, permits the import of such goods at zero customs duty;
  7. Supply to goods to the power projects and refineries should also be covered in above;
  8. Supply of margin freight containers by 100 percent EOU (Domestic Freight containers-manufacturers) provided the said containers are exported out of India within six months or such further period as permitted by the Customs; and
  9. Supply to projects funded by the United Nations agencies; and
  10. Supply of goods to nuclear power projects through competitive bidding as opposed to International Competitive Bidding.