Deemed exports un

[Mathi Bharathi]

Dear Sir / Madam

We are a manufacturer and supplied the goods by EPCG authorisation from our supplier . Hence the supply is treated as Deemed Exports. Now Please confirm that shall we apply for duty drawback through DGFT ? also we have applied for GST refunds... Kindly advice

[Shilpi Jain]

Query is a little confusing. Whether you are the supplier? Then you are mentioning that you have supplied goods against EPCG from supplier? or customer?

[Mathi Bharathi]

Mam,

We are a manufacturer and we are supplying our goods to buyer against EPCG license. Buyer having the EPCG License and they are procuring our goods EPCG Invalidation letter. ok

Now we are eligible for Deemed exports. Right..So shall we claim for Duty drawback by DGFT

[KASTURI SETHI]

Dear Sir,

(1) Duty drawback on account of deemed export is admissible against ARO (Advance Release Order) as per Chapter 7 --Para no. 7.04 read with para no. 7.03 (b) of Foreign Trade Policy, 2023. Also read Para No. 7.02 (A)(a).

(2) Further some restrictions have been laid down in Para Nos. 7.06 and 7.07 of FTP, 2023. Some restrictions have also been laid down in Drawback Rules, 2017. All should be read. A few relevant restrictions are given below. Drawback claim is not allowed :-

(i) If Customs duty has not been paid on inputs or the manufacturer has availed other benefit in respect of duty paid on inputs or services.

(ii) If imported inputs were obtained under Advance Authorization without payment of duty.

(iii) So many restrictions have been laid down in Drawback Rules, 2017. All are worth reading before arriving at any decision.

Disclaimer : Posted for academic interest and not for any court proceedings.

[KASTURI SETHI]

Drawback claim application should be filed with the jurisdictional Customs Commissionerate and not with DGFT office.

[YAGAY andSUN]

In addition to above replies, To avail duty drawback, follow these steps:

• Step 1: File a Bill of Export (or Shipping Bill) for the deemed export transaction.
  • The Bill of Export should mention that the goods have been sold under the EPCG Scheme and are deemed export.
  • Ensure the Invalidation Letter is referenced in the shipping bill or invoice, as this establishes that the goods sold fulfill the EPCG export obligation.
• Step 2: Submit Drawback Claim to Customs:
  • Submit the drawback claim to the Customs Department along with the Bill of Export and other required documents.
  • The documentation may include:
    • EPCG authorization details.
    • EPCG export obligation details.
    • A copy of the Invalidation Letter from DGFT.
    • Proof of payment for any customs duties on inputs used for manufacturing the goods.
• Step 3: Compliance with Drawback Scheme:
  • The Customs Department will verify your documents and, if all conditions are met, they will process the duty drawback.
  • Ensure that you meet all the requirements of the Duty Drawback Scheme, such as proper filing of documentation, adhering to deadlines, and maintaining the necessary records of the transaction.

    Refund of Customs Duties (Duty Drawback)

  • After the Customs Department verifies your claim, you will receive a refund of the customs duties paid on the imported inputs used in the production of exported goods.
  • The refund is typically credited to the account of the exporter, subject to any applicable processing time and administrative checks.

  • Documentation Required for Duty Drawback Against Deemed Export:

    Here is a list of documents typically required for claiming duty drawback under the EPCG Scheme for deemed exports:

  • Bill of Export/Shipping Bill:
    This should mention that the goods are under the EPCG Scheme and are deemed exports.
  • Invalidation Letter:
    Issued by DGFT, certifying that the sale of goods has fulfilled the export obligation under EPCG.
  • Invoice/Contract:
    The invoice or contract document detailing the sale of goods under the deemed export provision.
  • EPCG Authorization:
    A copy of the EPCG Authorization showing the export obligation and capital goods imported under duty exemption.
  • Proof of Customs Duty Paid:
    If any duties were paid on inputs used for the manufacture of the exported goods, provide proof of payment.
  • Proof of Export (where applicable):
    If required, provide evidence of the final destination of the goods 
  • Shipping Bill/Export Documentation:
    The shipping bill, export declaration, or other documentation that shows that the goods have been exported or considered as deemed export.
  • Payment Evidence:
    If applicable, provide the evidence of the payment of taxes or duties in case the goods are subject to any indirect taxes.

AI Summary

Deemed export duty drawback: eligibility and procedural filing with Customs, with documentation requirements and restrictions clarified. Deemed exports sold under an EPCG licence may be eligible for duty drawback if EPCG export obligations are evidenced by an Invalidation Letter and statutory exclusions (such as duty-free input benefits or unpaid customs duty on inputs) do not apply. Claims are filed with the jurisdictional Customs Commissionerate, accompanied by a Bill of Export/Shipping Bill noting the EPCG deemed export and supporting documents including EPCG authorisation, Invalidation Letter, invoices, and proof of customs duty payment where relevant.