Clarification on Deemed Export Status for EOU-to-EOU Supplies under GST

[Dashrath Walkoli]

sir

I am writing to seek clarification on the applicability of Notification No. 48/2017-Central Tax, dated 18.10.2017, and Circular No. 14/14/2017-GST, dated 06.11.2017, specifically concerning the treatment of a supply of goods from one Export Oriented Unit (EOU) to another EOU.

Notification No. 48/2017-Central Tax notifies "supply of goods by a registered person to an EOU" as a deemed export. Given that an EOU is also a "registered person" under the GST Act, a literal interpretation suggests that a supply from one EOU (as a supplier) to another EOU (as a recipient) should qualify as a deemed export.

The deemed export provision under Section 147 and Notification No. 48/2017-Central Tax was created for a very specific purpose: to provide a level playing field for domestic suppliers.

However, the procedural framework outlined in Circular No. 14/14/2017-GST, particularly the requirement for prior intimation in Form A and the endorsement of the invoice, seems to be primarily designed for DTA-to-EOU supplies, creating an ambiguity. This ambiguity leads to practical difficulties in determining the eligibility for a refund of GST paid on such supplies, as the refund mechanism under the deemed export provisions may not be applicable for EOU-to-EOU transactions.

I kindly request your official clarification on the following point:

Does a supply of goods by a registered EOU to another registered EOU qualify as a "deemed export" under Notification No. 48/2017-Central Tax, and whether refund of gst can be claimed?

AI Summary

Deemed export status of EOU-to-EOU supplies unclear; GST payable and deemed-export refund generally not available.
Supply of goods between EOUs is generally treated as a taxable supply under GST rather than an automatic deemed export; GST is payable on inter-unit transfers, procedural deemed-export requirements (Form A and invoice endorsement) may be impractical for such transfers, refund entitlement is disputed with some asserting possible refunds under administrative flexibility while others deny deemed-export coverage, and use of inputs on which customs duty exemptions were availed may trigger reversal or adjustment subject to customs conditions.