Deemed export

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Vaibhav

Vaibhav (Querist)
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28 April 2011 Sir,
What is Deemed export??
We made export out of india & DTA Sales here will be deemed export or not??

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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28 April 2011 The Foreign Trade (Development and Regulation) Act, 1992 defines export as taking out of India any goods by land, sea or air. Although the Act does not term them as "physical export", we have put this phrase to distinguish it from "deemed export" which is sales in India but considered as export for limited purposes. However, it includes re-exports.

Export includes physical exports including re-exports and deemed exports. There is a most conducive climate to export in view of liberalised EXIM and FOREX Policy, abolition of almost all controls on production and export/ import, provided proper preparation is made to start, expand or diversify export business.

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

Third party exports" me port made by an exporter or ma turer on behalf of another expo In such cases shipping bills sha cate the name of both the exp manufacturer and exporter(s).

The definition of exports defines taking out of good to a place outside India. It does not specify as to what form of these goods i.e. whether indigenous or imported. Hence, it includes re-exports of imported goods in any form or condition i.e. with or without any processing of manufacture, repacking, labelling, etc.
Conditions. Para 2.35 of the EXIM Policy, 2002-07 states:
Goods imported, in accordance with this Policy, may be exported in the same or substantially the same form, without a licence/certificate permission provided the item to be imported or exported is not restricted in the ITC (HS) Classification of Export-lmports Items. Exports of such goods imported against payment in freely convertible currency would be permitted against payment in freely convertible currency.

"Export" with its grammatical variations and cognate expressions, means taking out of India to a place outside India, as per Section 2 (18) or the Customs Act, 1962. The CA further defines "export goods" as "any goods which are to be taken out of India to a place outside India".
The Customs Act also contains definition of exporter, who in relation to any goods at any time between their entry for export and the time when they are exported includes any owner or any person holding himself out to be the exporter.
As such exports mean physical exports of any goods. However, "exports" scope has been widened to include "services" exports. As such, it now includes goods and services.

In terms of para 8.1 of the EXIM Policy 2002-07 "deemed export" means "those transactions in which the goods supplied do not leave the country". Hence, the essential characteristics of any sale to be considered as deemed export are:
(i) transaction may involve any item i.e. product only and not services.
(ii) the item does not leave the country i.e. exported outside India, if it goes out,the transaction will be termed as physical export.
The Exim Policy further specifies categories of supplies of goods by the main or sub-contractors as detailed in Chapter on Deemed Export Assistance in this book.

Export of engineering goods on deferred payment terms and execution of turnkey projects and civil construction contracts abroad are collectively referred to as "project exports". Further details are given in Chapter on project and services exports.

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