Description
This is a presentation explaining the deemed exports international marketing.
Deemed Export
Deemed Exports
• Definition • "Deemed Exports" refers to those transactions in which the goods supplied do not leave the country and the payment for such supplies is received either in Indian rupees or in free foreign exchange.
Reasons for Instituting Deemed Exports
• To prevent the outflow of Foreign Exchange by providing deemed export status to import substitutes • To generate the inflow of Foreign Exchange through promotion of exports
2 Scenarios of Deemed Export
Scenario 1
Supplier S
Manufacturer M
Outflow of Goods Inflow of Forex
2 Scenarios of Deemed Export
Exports Scenario 2
Manufacturer M
Outflow of forex Inflow of Supplies
Foreign Supplier
2 Scenarios of Deemed Export
Exports Scenario 2
Manufacturer M
Outflow of forex Inflow of Supplies
Foreign Supplier
Domestic Supplier
Benefits of Deemed Exports
a) Advance license for annual requirement b) Deemed Exports Drawback c) Exemption from terminal excise duty, where, supplies are made against international competitive bidding. In other cases Refund of terminal excise duty will be given.
Category 1: Supply of goods against Advance license Benefits Available: a, b, c
Supplier
Manufacturer
Category 2: Benefits: a,b,c
Export Oriented Units
Supplier of inputs
Deemed Exports
Software technology Parks Electronic Hardware technology Parks Biotechnology Parks
Category 3: Benefits : a, b, c
Supplier of inputs
Deemed Exports
Holder of Authorization under the export Promotion Capital Goods (EPCG) Scheme
Category 4: Benefits : a, b, c
World Bank
International Fund for Agricultural Development
Funds
Suppliers
Project
Asian Development Bank Organisation of Petroleum Exporting Countries
1- Tender evaluation of the suppliers for the project is WITHOUT including the customs duty
Yen Credit Channelized through Oversees Economic Cooperation Fund (OECF)
•Category 5: •Supply of capital goods, including in unassembled/disassembled condition as well as plants, machinery, accessories, tools, dies and such goods which are used for installation purposes till the stage of commercial production and spares to the extent of 10% of the FOR value to fertilizer plants; •Benefits : a, b
Supplier
Deemed exports
Fertilizer Plant
Category 6: Supply of goods to any project or purpose in respect of which the Ministry of Finance, by a notification, permits the import of such goods at zero customs duty; Benefits : a, b, c
Supplier
Goods which are substitutes for imports with Zero Customs Duty
Project
Category 7: Supply of goods to the power projects and refineries not covered above; Benefits : a,b,c
Category 8:
India
Domestic freight ContainersManufacturers (100% EOU)
Supply of Marine Freight Containers outside India
Category 9: Benefits : a, b
Supply of Goods Supplier
Project funded by UN agencies
Category 10 Benefits : a, b, c
Goods Supplier Nuclear Power Projects
the Procedure for Claiming the Benefits of ‘DEEMED EXPORTS’
• • • • An application in the form given in Appendix-17 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 10.2 (d) (e) (f) and (g) where it shall be filed on the basis of proof of having received the supplies. (iii) The application shall be filed within a period of six months from the end of the monthly /quarterly /half yearly period as per the option of the applicant. Such claims may also be filed even where part payment certificates have been received. (iv) Where no All Industry Rate of Drawback is available or the same is less than 4/5th of the duties paid on the material or components issued in the production or manufacture of the said goods, the exporter may apply for fixation of brand rate in the form given at Appendix-17 to the Regional Licensing Authority in duplicate. The Regional Licensing Authority shall forward a copy to Director General of Foreign Trade giving their file number for future correspondence. The application for fixation of brand rate shall be filed within a period of six months from the date of last supply covered under a single contract relating to an individual order or project. The application for claim of Drawback under brand rate shall be filed within a period of six months from the date of issuance of payment certificate. The provision of late cut as given in paragraph 15.15 shall also be applicable under this sub paragraph. (v) The Customs and Central Excise Duty Drawback Rules 1995 shall apply mutatis-mutandis to deemed exports subject to the procedure laid down in this Handbook. (vi) Regional Licensing Authorities may consider the 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.
• •
Categories of supply of Goods
• Supply of goods against Advance Authorisation/Advance Authorisation for annual requirement • Supply of goods to Export Oriented Units (EOUs) or Software Technology Parks (STPs) or Electronic Hardware Technology Parks (EHTPs) or Bio Technology Parks (BTP); • Supply of capital goods to holders of Authorisations under the Export Promotion Capital Goods (EPCG) scheme; • Supply of goods to projects financed by multilateral or bilateral agencies/funds as notified by the Department of Economic Affairs, Ministry of Finance under International Competitive Bidding in accordance with the procedures of those agencies/funds, where the legal agreements provide for tender evaluation without including the customs duty; • Supply of capital goods, including in unassembled/disassembled condition as well as plants, machinery, accessories, tools, dies and such goods which are used for installation purposes till the stage of commercial production and spares to the extent of 10% of the FOR value to fertilizer plants;
Categories of supply of Goods
• Supply of goods to any project or purpose in respect of which the Ministry of Finance, by a notification, permits the import of such goods at zero customs duty; • Supply of goods to the power projects and refineries not covered in (f) above; • Supply of marine freight containers by 100% EOU (Domestic freight containers - manufacturers) provided the said containers are exported out of India within 6 months or such further period as permitted by the customs; • Supply to projects funded by UN agencies; and • Supply of goods to nuclear power projects through competitive bidding as opposed to International Competitive Bidding.
Benefits Available Under ‘Deemed Exports’
• Deemed Exports shall be eligible for the following benefits in respect of manufacture and supply of goods qualifying as Deemed Exports: • a) Special Imp rest Licence/Advance Intermediate License;.
• b) Deemed Exports Drawback Scheme i.e, on the Deemed Exports, Drawback at the rate fixed by the Ministry of Finance for the DGFT or his regional Officers pay the goods physically exported.
• c) Refund of terminal excise duty ie., Central Excise duty, if paid any, on the goods supplied under Deemed Exports is refunded by the DGFT or his regional Officers
Benefits Available Under ‘Deemed Exports’
• d) ‘Special Import License’ at the rate of 6 per cent of the FOB value (excluding all taxes and levies) • e) If the supplier has made the supplies against Advance Release Order(ARO) or Back to Back Letter of Credit, he shall be entitled for the benefits of Deemed Exports Drawback Scheme, Refund or terminal excise duty and Special Imprest License • f) In respect of supply of capital goods to EPCG license holder, the supplier shall be entitled to the benefits stated above except, however, that the benefit of Special Imprest License or Deemed Export Drawback Scheme shall be available only in case of supplies made to Zero duty EPCG license holder.
Deemed Exports Duty Drawback
• Drawback Rule 16A provides for recovery of drawback where export sale proceeds are not realised within the stipulated time i.e. 180 days from the date of export and extension if any granted. Where a part of the sale proceeds is relaised, the recovery of drawback shall be of the amount equal to that portion of the amount of drawback paid which bears the same proportion as the portion of the sale proceeds not realised bears to the total amount of sale proceeds. If the exporter shows evidence of realisation of proceeds against which recovery of drawback was made within one year from the date of such recovery, the amount of drawback so recovered shall be repaid.
doc_208604383.pptx
This is a presentation explaining the deemed exports international marketing.
Deemed Export
Deemed Exports
• Definition • "Deemed Exports" refers to those transactions in which the goods supplied do not leave the country and the payment for such supplies is received either in Indian rupees or in free foreign exchange.
Reasons for Instituting Deemed Exports
• To prevent the outflow of Foreign Exchange by providing deemed export status to import substitutes • To generate the inflow of Foreign Exchange through promotion of exports
2 Scenarios of Deemed Export
Scenario 1
Supplier S
Manufacturer M
Outflow of Goods Inflow of Forex
2 Scenarios of Deemed Export
Exports Scenario 2
Manufacturer M
Outflow of forex Inflow of Supplies
Foreign Supplier
2 Scenarios of Deemed Export
Exports Scenario 2
Manufacturer M
Outflow of forex Inflow of Supplies
Foreign Supplier
Domestic Supplier
Benefits of Deemed Exports
a) Advance license for annual requirement b) Deemed Exports Drawback c) Exemption from terminal excise duty, where, supplies are made against international competitive bidding. In other cases Refund of terminal excise duty will be given.
Category 1: Supply of goods against Advance license Benefits Available: a, b, c
Supplier
Manufacturer
Category 2: Benefits: a,b,c
Export Oriented Units
Supplier of inputs
Deemed Exports
Software technology Parks Electronic Hardware technology Parks Biotechnology Parks
Category 3: Benefits : a, b, c
Supplier of inputs
Deemed Exports
Holder of Authorization under the export Promotion Capital Goods (EPCG) Scheme
Category 4: Benefits : a, b, c
World Bank
International Fund for Agricultural Development
Funds
Suppliers
Project
Asian Development Bank Organisation of Petroleum Exporting Countries
1- Tender evaluation of the suppliers for the project is WITHOUT including the customs duty
Yen Credit Channelized through Oversees Economic Cooperation Fund (OECF)
•Category 5: •Supply of capital goods, including in unassembled/disassembled condition as well as plants, machinery, accessories, tools, dies and such goods which are used for installation purposes till the stage of commercial production and spares to the extent of 10% of the FOR value to fertilizer plants; •Benefits : a, b
Supplier
Deemed exports
Fertilizer Plant
Category 6: Supply of goods to any project or purpose in respect of which the Ministry of Finance, by a notification, permits the import of such goods at zero customs duty; Benefits : a, b, c
Supplier
Goods which are substitutes for imports with Zero Customs Duty
Project
Category 7: Supply of goods to the power projects and refineries not covered above; Benefits : a,b,c
Category 8:
India
Domestic freight ContainersManufacturers (100% EOU)
Supply of Marine Freight Containers outside India
Category 9: Benefits : a, b
Supply of Goods Supplier
Project funded by UN agencies
Category 10 Benefits : a, b, c
Goods Supplier Nuclear Power Projects
the Procedure for Claiming the Benefits of ‘DEEMED EXPORTS’
• • • • An application in the form given in Appendix-17 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 10.2 (d) (e) (f) and (g) where it shall be filed on the basis of proof of having received the supplies. (iii) The application shall be filed within a period of six months from the end of the monthly /quarterly /half yearly period as per the option of the applicant. Such claims may also be filed even where part payment certificates have been received. (iv) Where no All Industry Rate of Drawback is available or the same is less than 4/5th of the duties paid on the material or components issued in the production or manufacture of the said goods, the exporter may apply for fixation of brand rate in the form given at Appendix-17 to the Regional Licensing Authority in duplicate. The Regional Licensing Authority shall forward a copy to Director General of Foreign Trade giving their file number for future correspondence. The application for fixation of brand rate shall be filed within a period of six months from the date of last supply covered under a single contract relating to an individual order or project. The application for claim of Drawback under brand rate shall be filed within a period of six months from the date of issuance of payment certificate. The provision of late cut as given in paragraph 15.15 shall also be applicable under this sub paragraph. (v) The Customs and Central Excise Duty Drawback Rules 1995 shall apply mutatis-mutandis to deemed exports subject to the procedure laid down in this Handbook. (vi) Regional Licensing Authorities may consider the 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.
• •
Categories of supply of Goods
• Supply of goods against Advance Authorisation/Advance Authorisation for annual requirement • Supply of goods to Export Oriented Units (EOUs) or Software Technology Parks (STPs) or Electronic Hardware Technology Parks (EHTPs) or Bio Technology Parks (BTP); • Supply of capital goods to holders of Authorisations under the Export Promotion Capital Goods (EPCG) scheme; • Supply of goods to projects financed by multilateral or bilateral agencies/funds as notified by the Department of Economic Affairs, Ministry of Finance under International Competitive Bidding in accordance with the procedures of those agencies/funds, where the legal agreements provide for tender evaluation without including the customs duty; • Supply of capital goods, including in unassembled/disassembled condition as well as plants, machinery, accessories, tools, dies and such goods which are used for installation purposes till the stage of commercial production and spares to the extent of 10% of the FOR value to fertilizer plants;
Categories of supply of Goods
• Supply of goods to any project or purpose in respect of which the Ministry of Finance, by a notification, permits the import of such goods at zero customs duty; • Supply of goods to the power projects and refineries not covered in (f) above; • Supply of marine freight containers by 100% EOU (Domestic freight containers - manufacturers) provided the said containers are exported out of India within 6 months or such further period as permitted by the customs; • Supply to projects funded by UN agencies; and • Supply of goods to nuclear power projects through competitive bidding as opposed to International Competitive Bidding.
Benefits Available Under ‘Deemed Exports’
• Deemed Exports shall be eligible for the following benefits in respect of manufacture and supply of goods qualifying as Deemed Exports: • a) Special Imp rest Licence/Advance Intermediate License;.
• b) Deemed Exports Drawback Scheme i.e, on the Deemed Exports, Drawback at the rate fixed by the Ministry of Finance for the DGFT or his regional Officers pay the goods physically exported.
• c) Refund of terminal excise duty ie., Central Excise duty, if paid any, on the goods supplied under Deemed Exports is refunded by the DGFT or his regional Officers
Benefits Available Under ‘Deemed Exports’
• d) ‘Special Import License’ at the rate of 6 per cent of the FOB value (excluding all taxes and levies) • e) If the supplier has made the supplies against Advance Release Order(ARO) or Back to Back Letter of Credit, he shall be entitled for the benefits of Deemed Exports Drawback Scheme, Refund or terminal excise duty and Special Imprest License • f) In respect of supply of capital goods to EPCG license holder, the supplier shall be entitled to the benefits stated above except, however, that the benefit of Special Imprest License or Deemed Export Drawback Scheme shall be available only in case of supplies made to Zero duty EPCG license holder.
Deemed Exports Duty Drawback
• Drawback Rule 16A provides for recovery of drawback where export sale proceeds are not realised within the stipulated time i.e. 180 days from the date of export and extension if any granted. Where a part of the sale proceeds is relaised, the recovery of drawback shall be of the amount equal to that portion of the amount of drawback paid which bears the same proportion as the portion of the sale proceeds not realised bears to the total amount of sale proceeds. If the exporter shows evidence of realisation of proceeds against which recovery of drawback was made within one year from the date of such recovery, the amount of drawback so recovered shall be repaid.
doc_208604383.pptx