TaxTMI 
TaxTMI 
We are supplying packing material to SEZ. The supplies are made under LUT and ARE-1. The Superintendent says that mere getting the proof of export by getting the ARE-1 signed by SEZ Customs authorities would not do. Payment for the supplies has to be received from our customer's Foreign currency account. If payment is made from Indian Rupee account, then he contends the transaction from DTA cannot be considered as deemed exports and the Central excise has to be paid on the clearances. Pl discuss
Clarification - DTA
13 Aug 2008 
3 Replies 
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Deemed export principle: payment currency does not affect treatment of supplies to SEZ when ARE-1 evidence exists.
Supplies of packing material from the DTA to an SEZ, when supported by Form ARE-1 returned as "Fully received," are treated as supplies to SEZ (foreign territory) for excise purposes; payment currency or routing through an Indian rupee account is not a prescribed condition for recognition of such removals, and the Foreign Trade Policy does not require foreign currency receipt to avoid excise liability. (AI Summary)
Supplies of packing material from the DTA to an SEZ, when supported by Form ARE-1 returned as "Fully received," are treated as supplies to SEZ (foreign territory) for excise purposes; payment currency or routing through an Indian rupee account is not a prescribed condition for recognition of such removals, and the Foreign Trade Policy does not require foreign currency receipt to avoid excise liability. (AI Summary)