Export certificate epcg scheme

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 April 2013 Our client has made deemed export of Electric fittings to the unit in SEZ complex

Whether the said transaction can be treated as export? even if the said material is used for the construction of the SEZ unit

What measures should be taken to verify that the same is used for further export and not used for their unit

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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08 May 2013 Deemed Exports :8.1 Deemed Exports” refers to those transactions in which goods supplied do not leave country, and payment for such supplies is received either in Indian rupees or in free foreign exchange.
Categories of Supply : 8.2 Following categories of supply of goods by main / sub-contractors shall be regarded as “Deemed Exports” under FTP, provided goods are manufactured in India:

Supply of goods against Advance Authorisation / Advance Authorisation for annual requirement / DFIA;
Supply of goods to EOUs or STPs or EHTPs or BTPs;
Supply of capital goods to holders of Authorisations under EPCG Scheme;
Supply of goods to projects financed by multilateral or bilateral agencies / Funds as notified by Department of Economic Affairs (DEA), MoF under International Competitive Bidding (ICB) in accordance with procedures of those agencies / Funds, where legal agreements provide for tender evaluation without including customs duty; Supply and installation of goods and equipment (single responsibility of turnkey contracts) to projects financed by multilateral or bilateral agencies / Funds as notified by DEA, MoF under ICB, in accordance with procedures of those agencies / Funds, which bids may have been invited and evaluated on the basis of Delivered Duty Paid (DDP) prices for goods manufactured abroad;
Supply of capital goods, including in unassembled / disassembled condition, as well as plants, machinery, accessories, tools, dies and such goods which are used for installation purposes till stage of commercial production, and spares to extent of 10% of FOR value to fertilizer plants;
Supply of goods to any project or purpose in respect of which the MoF, by a notification, permits import of such goods at zero customs duty;
Supply of goods to power projects and refineries not covered in (f) above;
Supply of marine freight containers by 100%EOU (Domestic freight containers-manufacturers) provided said containers are exported out of India within 6 months or such further period as permitted by customs;
Supply to projects funded by UN agencies; and (j) Supply of goods to nuclear power projects through competitive bidding as opposed to ICB. Benefits of deemed exports shall be available under paragraphs (d), (e), (f) and (g) only if the supply is made under procedure of ICB.

Benefits for Deemed Exports8.3 Deemed exports shall be eligible for any / all of following benefits in Deemed Exports respect of manufacture and supply of goods qualifying as deemed exports subject to terms and conditions as in HBP v1:-

Advance Authorisation / Advance Authorisation for annual requirement/ DFIA.
Deemed Export Drawback.
Exemption from terminal excise duty where supplies are made against ICB. In other cases, refund of terminal excise duty will be given.

Benefits to Deemed Export 8.4.1

respect of supplies made against Advance the Supplier Authorisation / DFIA in terms of paragraph 8.2(a) of FTP, supplier shall be entitled to Advance Authorisation / DFIA for intermediate supplies.
If supplies are made against Advance Release Order (ARO) or Back to Back Letter of Credit issued against Advance Authorisation / DFIA in terms of paragraphs 4.1.11 and 4.1.12 of FTP, suppliers shall be entitled to benefits listed in paragraphs 8.3(b) and (c) of FTP, wherever is applicable.