| Policy |
8.1 |
The Policy relating to Deemed Exports is given in Chapter-8
of the Foreign Trade Policy. |
| Benefits to the Supplier |
8.2 |
In respect of supplies made against Advance Licence in terms of
paragraphs 8.2(a) of the Policy, the supplier shall be entitled to
Advance Licence for intermediate supplies. |
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(i) |
If the supplies are made against Advance Release Order (ARO) or
Back to Back Letter of Credit issued against Advance Licence, in terms
of paragraphs 4.1.11 and 4.1.12 of the Policy, supplier shall be entitled
to the benefits listed in paragraphs 8.3(b) and (c) of the Policy,
whichever is applicable. |
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(ii) |
However, in such cases where Advance Release Order (ARO) or Back
to Back Letter of Credit has been issued against DFRC, in terms of
paragraphs 4.1.11 and 4.1.12 of the Policy, supplier shall be entitled
only to the benefit listed in paragraph 8.3(b) of the Policy. |
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8.2.1 |
In respect of supply of goods to EOU/ EHTP/ STP/BTP in terms of
paragraphs 8.2 (b) of the Policy, the supplier shall be entitled to
the benefits listed in paragraph 8.3(a),(b)and (c) of the Policy,
whichever is applicable. |
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8.2.2 |
In respect of supplies made under paragraph 8.2(c) of the Policy
, the supplier shall be entitled to the benefits listed in paragraph
8.3(a), (b) and (c), of the Policy, whichever is applicable. |
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8.2.3 |
In respect of supplies made under paragraphs 8.2 (d), (f) and (g)
of the Policy, the supplier shall be entitled to the benefits listed
in paragraphs 8.3(a),(b) and (c),whichever is applicable. |
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8.2.4 |
In respect of supplies made under paragraph 8.2(e) of the Policy,
the supplier shall be eligible for the benefits listed in paragraph
8.3(a) and (b) of the Policy, whichever is applicable. |
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8.2.5 |
The supplies of goods to projects funded by UN agencies covered
under para 8.2(i) of the Policy are eligible for benefits listed in
paragraph 8.3(a) and (b) of the Policy, whichever is applicable. |
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8.2.6 |
In respect of supplies made to Nuclear Power Projects, the supplier
would be eligible for benefits given in para 8.3(a), (b) and (c) of
the Policy , whichever is applicable. |
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8.3 |
In all cases of deemed exports, supplies shall be made directly
to the designated Projects/ Agencies/ Units/ Advance Licence/EPCG
licence holders. The sub-contractor may, however, make the supplies
to the main contractor as per paragraph 8.5 instead of designated
projects/ agencies. |
| Procedures/Criteria for claiming Deemed Exports Benefit
|
8.4 |
| (i) |
The procedures for issue of ARO and Back to Back
Inland Letter of Credit, in respect of supplies under paragraph
8.2(a) of the Policy, is given in paragraphs 4.14 and 4.15 of
this Handbook. |
| (ii) |
For the purpose of claiming deemed export benefits, if any,
the indigenous supplier shall produce documentary evidence substantiating
the realisation of proceeds from the recipient through the normal
banking channel in the form given in Appendix-22A as well as
a copy of ARO/ Non-negotiable copy of Back to Back Inland Letter
of Credit. |
|
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8.4.1 |
In respect of supplies under paragraphs 8.2 (b) of the Policy, the
DTA unit shall claim the deemed exports benefit from the concerned
Development Commissioner except the Advance Licence for deemed export
and DFRC. Advance licence for deemed exports and DFRC shall be claimed
from the concerned licensing authority. For supplies to EHTP/STP/BTP,
the DTA unit shall claim deemed export benefits from the licensing
authority concerned. Such supplies shall be certified by the receiving
agencies. |
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8.4.2 |
In respect of supply of capital goods under paragraphs 8.2 (c) of
the Policy, the supplier shall produce a certificate from the respective
Excise authorities evidencing supplies/ receipt of the manufactured
capital goods and shall produce documentary evidence substantiating
the realisation of proceeds from the EPCG licence holder through the
normal banking channel in the form given in Appendix- 22A. |
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8.4.3 |
In respect of supplies under categories mentioned in paragraphs
8.2(d),(e),(f),(g),(h) and (j) of the Policy, payment against such
supplies shall be certified by the Project Authority concerned,
as prescribed in form given in Appendix-12A.
However, in respect of supplies mentioned in paragraph 8.2(d),
supplies to the projects funded by such agencies alone, as may be
notified by Department of Economic Affairs, Ministry of Finance,
shall be eligible for deemed export benefits. A list of such agencies/
funds is given in Appendix-33. |
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8.4.4 |
| (a) |
Supplies under category mentioned in paragraphs
8.2 (e) of the Policy shall be for the fertilizer plants being
set up at Kakinada, Gadepan, Babrala and Shahjahanpur and those
which may have been set up or expanded/ revamped/ retrofitted/
modernised during the Eighth Plan period. |
| (b) |
The benefit of deemed exports shall also be available in respect
of supplies of capital goods and spares to fertilizer plants
which are set up or expanded/ revamped/ retrofitted/ modernised
during the Ninth Plan period. The benefit of deemed exports
shall also be available on supplies made to Fertilizer plants,
which have started in the 8th /9th Plan periods and spilled
over to the 10th Plan period. |
|
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8.4.5 |
The benefits of deemed exports under para 8.2(f) of the Policy shall
be applicable in respect of items, import of which is allowed by the
Department of Revenue at zero customs duty subject to fulfillment
of conditions specified under Customs notification No.21/2002- dated
1/3/2002, as amended from time to time. |
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8.4.6 |
Supply of capital goods and spares upto 10% of the FOR value
of the capital goods to the power projects in terms of paragraphs
8.2(g) shall be entitled for deemed export benefits provided the
International Competitive Bidding procedures have been followed,
at Independent Power Producer (IPP)/Engineering, Procurement and
Construction (EPC) stage. The benefit of deemed exports shall also
be available for renovation/ modernisation of power plants. The
supplier shall be eligible for benefits listed in paragraph 8.3(a)
and (b) of the Policy.
However, supply of goods required for setting up of any mega power
projects as specified in S.No.400 of Department of Revenue notification
No.21/2002-Customs dated 1/3/2002, as amended, shall be eligible
for deemed exports benefits as mentioned in paragraph 8.3(a)(b)
and (c) of the Policy, whichever is applicable, if such mega power
project is -
(a) an inter state thermal power plant of a capacity of 1000 MW
or more; or
(b) an inter-state hydel power plant of a capacity of 500 MW or
more. |
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8.4.7 |
Supplies under paragraph 8.2(g) of the Policy to the new refineries
being set up during the Ninth plan period , and spilled over to the
Tenth plan period shall be entitled for deemed export benefits in
respect of goods mentioned in list 17 specified in S.No.228 of Notification
No.21/2002-Customs dated 1.3.2002, as amended from time to time. |
| Supplies to Nuclear Power project |
8.4.8 |
Supply of goods required for setting up any nuclear power project
specified in list 43 specified in S.No.401 of Notification No.21/2002-Customs
dated 1.3.2002, as amended from time to time having a capacity of
440 MW or more as certified by an officer not below the rank of Joint
Secretary of Government of India in the department of Atomic Energy
shall be entitled for deemed exports benefits in cases where the procedure
of competitive bidding (and not international competitive bidding)
has been followed. |
| Benefits to Sub-Contractor |
8.5 |
Supplies made by an Indian sub-contractor of an Indian or foreign
main contractor, shall also be eligible for deemed export benefits
provided the name of the sub-contractor is indicated either originally
or subsequently in the contract, and payment certificate is issued
by the project authority in the name of the sub-contractor in the
form given in Appendix 12A.
In respect of supplies made by sub-contractor to the main contractor
under paragraph 8.2 (d)(e) (f) (g)(i) and (j), the main contractor
may make payment to the sub-contractor and issue payment certificate
in the form given in Appendix-12A as Form 1-C. However, for supplies
under paragraph 8.2(d) (e) (f) (g) and (j), the payment certificate
from main contractor shall not be insisted for refund of Terminal
Excise duty. The deemed exports benefits to the sub-contractor would
be available to the extent of goods that are manufactured and supplied
by him or outsourced from other manufacturers, for the value as
indicated in Appendix 12-A. |
| Procedure for claiming Deemed Exports Drawback & Terminal
Excise Duty Refund/Exemption from payment of Terminal Excise Duty. |
8.6 |
The procedure for claiming benefits under paragraph 8.3 (b)
and (c) of the Policy shall be as under:-
| (i) |
An application in the form given in Appendix-12B,
alongwith the documents prescribed therein, shall be made to
the Regional Licensing Authority concerned. |
| (ii) |
The claim shall be filed against payment certificate received
on monthly basis/quarterly basis/half yearly basis, except for
supplies under paragraph 8.2 (d), (e), (f) (g) and (j), where
it may be filed either on the basis of payment certificate or
on the basis of proof of supplies effected. The claim may be
filed either covering the payment certificate received for the
supplies against a particular project or supplies to all the
projects effected during the month/quarter/half year as per
the option of the applicant. In addition, the applicant shall
also have the option to file claim covering all the supplies
to a project. |
|
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8.6.1 |
Such claims shall be filed within a period of six months from the
end of monthly/quarterly/half yearly period as per the option of the
applicant which shall be counted from the date of receipt of the payment
certificate or from the date of certificate of receipt of the supplies
by the Project Authority as per the applicant's option. Such claims
may also be filed where part payment certificates have been received. |
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8.6.2 |
For claiming exemption from payment of terminal excise duty, procedure
prescribed by the Central Excise Authority shall be followed. |
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8.6.3 |
Where no All Industry Rate of Drawback is available or the same
is less than 4/5th of duties actually paid on the materials or components
used in the production or manufacture of the said goods, the exporter/
supplier may apply for fixation of brand rate in the application form
as given in Appendix 12B to the regional licensing authority/Development
Commissioner in respect of supplies made to EOU/EHTP/STP/BTP as per
jurisdiction indicated in Appendix 24 of the Handbook of Procedures
Vol.I. |
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8.6.4 |
The claim application shall be filed along with the application
for fixation of brand rate of duty drawback in case brand rate is
required to be fixed. The provision of late cut under paragraph 9.3
and supplementary claim under paragraph 9.4 shall also be applicable
under this sub-paragraph. |
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8.6.5 |
Regional Licensing Authorities may consider provisional payment
to the extent of 75% of the drawback claim in the case of private
companies and 90% in the case of Public Sector Undertakings, pending
fixation of Brand Rate. |
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8.6.6 |
Subject to the procedure laid down in this Handbook, the Customs
and Central Excise Duty Drawback Rules, 1995 shall apply mutatis-mutandis
to deemed exports. |
