United Nations or an International organization approved by Government of India in pursuance of section 3 of United Nations (Privileges and Immunities Act), 1947. List of such organization and conditions applicable to such supplies is given in the Customs notification no. 84/97-Customs dated 11.11.1997, as amended from time to time. A list of Agencies, covered under this paragraph, is given in Appendix-7B.
- Supply of goods to nuclear power projects provided:
- Such goods are required for setting up of any Nuclear Power Project as specified in the list 32 at Sl. No. 602, Customs notification no. 50/2017-Customs dated 30.6.2017, as amended from time to time and subject to conditions mentioned
- The project should have a capacity of 440 MW or
- A certificate to the effect is required to be issued by an officer not below the rank of Joint Secretary to Government of India, in Department of Atomic
- Tender is invited through National competitive bidding (NCB) or through
Benefits for Deemed Exports
Deemed exports shall be eligible for any / all of following benefits in respect of manufacture and supply of goods, qualifying as deemed exports, subject to terms and conditions as given in HBP and ANF-7A:
- Advance Authorisation / Advance Authorisation for annual requirement / DFIA.
- Deemed Export Drawback for BCD.
- Refund of terminal excise duty for excisable goods mentioned in Schedule 4 of Central Excise Act 1944 provided the supply is eligible under that category of deemed exports and there is no exemption.
Benefits to the Supplier /Recipient
Categories of supplies as per Para 7.02 | Benefits on supplies, as given in Para 7.03 above, whichever is applicable. |
Para 7.03 (a) Advance Authorisation | Para 7.03 (b) Duty Drawback | Para 7.03 (c) Terminal Excise Duty |
(a) | Yes (for inter mediate supplies against an invalidation letter) | Yes (against ARO) | Yes |
(b) | Yes | Yes | Yes |
(c) | Yes | Yes | NA |
(d) | Deleted | deleted | deleted |
(e) | Yes | Yes | NA |
(f) | Yes | Yes | Yes, only for para 7.08(iii)(a) |
(g) | Yes | Yes | NA |
(h) | Yes | Yes | NA |
Conditions for refund of terminal excise duty
- Supply of goods will be eligible for refund of terminal excise duty as per Para 7.03 (c) of FTP, provided recipient of goods does not avail CENVAT credit/rebate on such Goods
Conditions for refund of deemed export drawback
Supplies will be eligible for deemed export drawback as per para 7.03 (b) of FTP, as under:
The refund of drawback in the form of Basic Customs duty of the inputs used in manufacture and supply under the said category shall be given on brand rate basis upon submission of documents evidencing actual payment of basic custom duties.
Common conditions for deemed export benefits
- Supplies shall be made directly to entities listed in the Para 7.02. Third party supply shall not be eligible for benefits/exemption.
- In all cases, supplies shall be made directly to the designated Projects / Agencies/ Units/ Advance Authorisation/ EPCG Authorisation holder. Sub-contractors may, however, make supplies to main contractor instead of supplying directly to designated Projects/ Agencies. Payments in such cases shall be made to sub-contractor by main-contractor and not by project Authority.
- Supply of domestically manufactured goods by an Indian Sub- contractor to any Indian or foreign main contractor, directly at the designated project’s/ Agency’s site, shall also be eligible for deemed export benefit provided name of sub-contractor is indicated either originally or subsequently (but before the date of supply of such goods) in the main contract. In such cases payment shall be made directly to sub-contractor by the Project
Benefits on specified supplies
- Deemed export benefits shall be available for supplies of ‘Cement” under Para 7.02 (e)
- Deemed export benefit shall be available on supply of “Steel”:
- As an inputs to Advance Authorisation/ Annual Advance Authorisation/DFIA holder/ an EOU.
- To multilateral/ bilateral funded Agencies as per sub-Para 7.02(e).
- Deemed export benefit shall be available on supply of “Fuel” (in respect of eligible fuel items covered under Schedule 4 of Central Excise Act 1944) provided supplies are made to:
- Project listed for petroleum operations in the Customs Notification No. 50/2017-Customs dated 6.2017 under Sr. No. 404, as amended from time to time and subject to conditions mentioned therein and covered in Para 7.02 (f) of FTP.
- EOUs;
- Advance Authorisation holder / Annual Advance Authorisation holder.
Liability of Interest
Incomplete/deficient application is liable to be rejected. However, simple interest @ 6% per annum will be payable on delay in refund of duty drawback and terminal excise duty under the scheme, provided the claim is not settled within 30 days from the date of issue of final Approval Letter by RA.
Risk Management and Internal Audit mechanism
- A Risk Management system shall be in operation, wherein every month, Computer system in DGFT headquarters, on random basis, will select 10% of cases, for each RA, where benefit(s) under this chapter has/have already been granted. Such cases shall be scrutinized by an internal Audit team, headed by a Joint DGFT, in the office of respective Zonal DGFT. The team will be responsible to audit claims of not only for its own office but also the claims of all RAs falling under the jurisdiction of the Zone.
- The respective RA may also, either on the basis of report from Internal Audit/ External Audit Agency(ies) or suo-motu, reassess any case, where any erroneous/in-eligible payment has been made/claimed. RA will take necessary action for recovery of payment
along with interest at the rate of 15% per annum on the recoverable amount.
Penal Action
In case, claim is filed by submitting mis-declaration/mis-representation of facts, then in addition to effecting recovery under Para 7.10(b) above, the applicant shall be liable for penal action under the provisions of F.T. (D&R) Act, Rules and orders made there under.
Transitional Para
Deemed exports benefits contained in FTP 2015-20 shall be available for supplies effected till 30.06.2017 in terms of FTP 2015-20 provisions as it stood till 30.06.2017. In respect of supply made after 30.6.2017, new provision shall apply.