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deemed exports

Nandan (Director) (27 Points)

12 April 2017

sir I would like to know how the deemed exports are treated under gst. we supply materials to power projects through PAC route and are exempted from paying excise on sales. however our input raw materials are with excise duty. Nandan, Harshini EPC Private Limited

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9 Replies

BN Murali (Manager) (129 Points)
Replied 12 April 2017

deemed export benefit will continue in gst regime and still exempted list not notified.

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Nandan (Director) (27 Points)
Replied 12 April 2017

I didn't understand. under deemed export in the current system refund of input tax is not available. under gst can we get refund of input tax paid on raw materials.

BN Murali (Manager) (129 Points)
Replied 12 April 2017

input stage refund not available in gst. in case export with payment of gst , refund available in 90 days as per gst act.incase of deemed export with payment of tax .same need to be claimed from dgft( still not notified).at any point input stage benefit not available in gst.

Nandan (Director) (27 Points)
Replied 12 April 2017

OK thank you.

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 12 April 2017

Deemed export benefit is likely to continue even under GST regime. Presently is it duty free supply with Cenvat benefit (though refund of cenvat not available). What shape it will take after implementation og GST is anybody's guess. There may be certain changes in procedures, but these substantial benefits will continue most probably.

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Nandan (Director) (27 Points)
Replied 13 April 2017

in the current excise regime we have to pay excise duty on our inputs and on our sale to deemed export projects there is no excise. so all our input is in our books as cenvat credit without utilisation. if this is not addressed then it would be a problem for msme sector

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 13 April 2017

True, this problem is there. EOU can easily procure goods on payment of duty, take credit, export after payment of duty and take rebate. But they prefer to procure on CT-3, and cenvat credit gets accumulated at supplier end. For a unit supplying to EOU, although it is theoretically possible to procure goods without payment of duty (domestic supply against invalidated advance authorisation), procedures are complicated. Supplier unit can also supply after payment of duty and can claim refund of terminal excise duty from DGFT. Again a difficult time consuming procedure.

Deemed export benefits are given by Directorate General of Foreign Trade. This affects the procedural efficiency. May be, some simplication will be brought in deemed export benefits in GST regime.