Amended and updated notes on section 147 of CGST Act, 2017. Detail discussion on provisions and rules related to deemed exports.
Chapter XXI (Sections 143–174) of the Central Goods and Services Tax Act, 2017 deals with the provisions related to miscellaneous. Section 147 of CGST 2017 provides for deemed exports.
Recently, we have discussed in detail section 146 (Common Portal) of CGST Act 2017. Today, we learn the provisions of section 147 of Central GST Act 2017.
Section 147 of the Central Goods and Services Tax Act, 2017 has been notified by the Ministry of Finance vide Notification No. 1/2017-Central Tax, G.S.R. 605(E), dated 19.06.2017. This notification was come into force from 22nd June, 2017 i.e. the commencement date of section 147 is 22-6-2017.
| Name of Act | The Central Goods and Services Tax Act 2017 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Central Board of Indirect Taxes & Customs |
| Governing body | GST Council |
| Number of Chapters | 21 |
| Number of Sections | 174 |
| You are reading: | |
| Chapter No. | XXI |
| Chapter Name | Miscellaneous |
| Section No. | 147 |
| Section Name | Deemed exports |
| Monthly Updated 2025 Edition | GST Law Book PDF |
Section 147 of Central GST – Deemed exports1
Section 147 of CGST Act 2017 shall come into force on 22.06.2017 vide Notification No. 1/2017-Central Tax, G.S.R. 605(E), dated 19.06.2017.
The Government may, on the recommendations of the Council, notify certain supplies of goods as deemed exports, where goods supplied do not leave India, and payment for such supplies is received either in Indian rupees or in convertible foreign exchange, if such goods are manufactured in India.
The Central Government vide Notification No. 48/2017-Central Tax, G.S.R.1305 (E) dated 18-10-2017 as amended by Notification No. 1/2019-Central Tax, G.S.R.33 (E) dated 15-01-2019, on the recommendations of the Council, hereby notifies the supplies of goods listed in column (2) of the Table below as deemed exports, namely:—
TABLE
| S. No. | Description of Supply |
|---|---|
| (1) | (2) |
| 1. | Supply of goods by a registered person against Advance Authorisation Provided that goods so supplied, when exports have already been made after availing input tax credit on inputs used in manufacture of such exports, shall be used in manufacture and supply of taxable goods (other than nil rated or fully exempted goods) and a certificate to this effect from a chartered accountant is submitted to the jurisdictional commissioner of GST or any other officer authorised by him within 6 months of such supply,: Provided further that no such certificate shall be required if input tax credit has not been availed on inputs used in manufacture of export goods. |
| 2. | Supply of capital goods by a registered person against Export Promotion Capital Goods Authorisation |
| 3. | Supply of goods by a registered person to Export Oriented Unit |
| 4. | Supply of gold by a bank or Public Sector Undertaking specified in the notification No. 50/2017-Customs, dated the 30th June, 2017 (as amended) against Advance Authorisation. |
Explanation:
1. “Advance Authorisation” means an authorisation issued by the Director General of Foreign Trade under Chapter 4 of the Foreign Trade Policy 2015-20 for import or domestic procurement of inputs for physical exports.
2. Export Promotion Capital Goods Authorisation means an authorisation issued by the Director General of Foreign Trade under Chapter 5 of the Foreign Trade Policy 2015-20 for import of capital goods for physical exports.
3. “Export Oriented Unit” means an Export Oriented Unit or Electronic Hardware Technology Park Unit or Software Technology Park Unit or Bio-Technology Park Unit approved in accordance with the provisions of Chapter 6 of the Foreign Trade Policy 2015-20.
In exercise of the powers conferred by clause (g) of sub-rule (2) of rule 89 of the Central Goods and Services Tax Rules, 2017 read with notification No. 48/2017-Central Tax, dated the 18th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 1305(E), dated the 18th October, 2017, the Central Government vide Notification No. 49/2017-Central Tax, G.S.R. 1306(E) dated 18-10-2017 notifies the following, as detailed in column (2) of the Table below, as evidences which are required to be produced by the supplier of deemed export supplies for claiming refund, namely:—
TABLE
| SL. No. | Evidence |
|---|---|
| (1) | (2) |
| 1. | Acknowledgment by the jurisdictional Tax officer of the Advance Authorisation holder or Export Promotion Capital Goods Authorisation holder, as the case may be, that the said deemed export supplies have been received by the said Advance Authorisation or Export Promotion Capital Goods Authorisation holder, or a copy of the tax invoice under which such supplies have been made by the supplier, duly signed by the recipient Export Oriented Unit that said deemed export supplies have been received by it. |
| 2. | An undertaking by the recipient of deemed export supplies that no input tax credit on such supplies has been availed of by him. |
| 3. | An undertaking by the recipient of deemed export supplies that he shall not claim the refund in respect of such supplies and the supplier may claim the refund. |
- Section 147 of CGST Act 2017 shall come into force on 22.06.2017 vide Notification No. 1/2017-Central Tax, G.S.R. 605(E), dated 19.06.2017. ↩︎
Notes on Section 147 of CGST Act
Under Section 147 of the Central Goods and Services Tax (CGST) Act, 2017, the government has the power to classify certain supplies of goods as deemed exports based on the recommendations of the GST Council.
Key Aspects of Section 147
- Definition of Deemed Exports
- Deemed exports refer to certain supplies of goods that, although do not involve the physical movement of goods outside India, are still treated as exports for taxation purposes.
- Unlike regular exports, deemed exports occur within India but are eligible for certain export benefits.
- Conditions for Deemed Exports
- The goods must be manufactured in India.
- The supply of such goods must be notified by the government based on GST Council recommendations.
- The goods should not leave India as part of the supply.
- Payment for such goods must be received either in Indian rupees or in convertible foreign exchange.
- Benefits of Deemed Exports
- Refund of GST: The recipient of deemed exports can claim a refund of GST paid on such supplies.
- No requirement for LUT (Letter of Undertaking): Unlike physical exports, deemed exports do not require an LUT for tax exemption.
- Encouragement of domestic production: This provision primarily benefits Indian manufacturers by allowing tax benefits similar to exports while ensuring goods remain in India.
- Examples of Deemed Exports
The government has notified specific transactions as deemed exports, including:- Supply of goods against an Advance Authorization.
- Supply of goods to an Export Oriented Unit (EOU).
- Supply of capital goods under Export Promotion Capital Goods (EPCG) scheme.
- Supply of goods for specified defense projects.
- Procedural Requirements
- The supplier or recipient must file a refund application in Form GST RFD-01 for claiming a refund of GST.
- Documentary evidence such as tax invoices and payment receipts must be submitted.
Conclusion: Section 147 of the CGST Act provides a crucial framework for boosting domestic manufacturing while offering tax benefits similar to exports. By allowing certain supplies to be classified as deemed exports, the provision ensures that domestic suppliers can compete effectively while enjoying tax relief.