Benefit of Exemption for Deemed Export

[Vinay Kunte]

It is given to understand the the Deemed Export are exempted Under IGST as per provisions of certain notifications issued in October 2017. Similarly, the IGST @0.1% or CGST/SGST or UTGST @0.05%, respectively, is to be paid by the supplier of Goods to other Registered person for Exports (Erstwhile Merchant Exporters).

My query is whether the ).1% IGST or 0.05% CGST is to be paid on goods supplied by a registered dealer under Deemed exports to other registered person or should be exempted in totality?

Please provide your valuable guidance.

[Rajagopalan Ranganathan]

Sir,

The tax rate of 0.05% in respect of CGST and SGST and 0.1% in respect of IGST is applicable only for export of goods. In respect of deemed export the supplier has to be pay the tax at normal rate and refund of such tax paid is to be claimed as provided under third proviso to rule 89 (1) of CGST Rules, 2017 which is as under: -

"Provided also that in respect of supplies regarded as deemed exports, the application may be filed by, -

(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."

[Vinay Kunte]

Thank you Sir for the clarification.

[KASTURI SETHI]

I support the views of Sh.Ranganathan Sir. However, I post the following information as additional knowledge :-

Deemed Exports - Evidence required for claiming refund on deemed exports under CGST Rule 89(2)(g)

In exercise of the powers conferred by clause (g) of sub-rule (2) of rule 89 of the Central Goods and Services Tax Rules, 2017 read with notification No. 48/2017-Central Tax, dated the 18th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 1305(E), dated the 18th October, 2017, the Central Government hereby notifies the following, as detailed in column (2) of the Table below, as evidences which are required to be produced by the supplier of deemed export supplies for claiming refund, namely :-

TABLE

S.No.	Evidence
(1)	(2)
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.

Notification No. 49/2017-C.T., dated 18-10-2017]

[Nash Industries I Pvt Ltd]

refer circular No 14/14/2017-GST issued from F.no 349/21/2016 GST (Policy Wing) dated 06.11.2017.

Regards

S.Ramaswamy

AI Summary

Deemed export tax treatment: supplier pays tax at normal rate with refund available under GST rules. Deemed export supplies are subject to tax at the normal rates and the supplier may claim refund of such tax under the refund provisions where the recipient has not availed input tax credit and furnishes an undertaking permitting the supplier to claim refund. Refund claims by suppliers require prescribed evidence, including acknowledgement of receipt by Advance Authorisation or Export Promotion Capital Goods holders or a recipient-signed invoice, and undertakings that input tax credit has not been availed and that the recipient will not claim the refund.