GST Refund - Deemed Exports (Section 147 CGST + Notification 48/2017)

Section 147 of the CGST Act 2017 enables the Central Government to notify certain supplies of goods as deemed exports - supplies where the goods stay in India but the transaction is treated as export for indirect tax neutrality. The legislative purpose is to remove GST as a cost in the export-linked supply chain - particularly for domestic manufacturers feeding Advance Authorisation holders, EPCG capital goods recipients, and EOU/EHTP/STP/BTP units that ultimately push their output abroad. Without Section 147, every domestic input feeding an export would carry a GST cost component that distorts price competitiveness against duty-free imported alternatives.

The four categories notified under Notification 48/2017-Central Tax dated 18 October 2017 are bounded by Foreign Trade Policy 2015-20 definitions (now read with FTP 2023). Advance Authorisation is the DGFT-issued duty-free input procurement licence under Chapter 4 of FTP. EPCG covers capital goods under Chapter 5 of FTP. EOU/EHTP/STP/BTP units operate under Chapter 6 of FTP. The fourth category covers gold supplied by banks and PSUs against AA under Notification 50/2017-Customs. Notification 49/2017-Central Tax sets the evidentiary requirements; Circular 14/14/2017-GST dated 06 November 2017 prescribes the Form A prior intimation procedure for EOU recipients. Rule 89(1) third proviso of CGST Rules 2017 grants the unique either-supplier-or-recipient filing right - distinguishing deemed exports from every other refund category. Patron Accounting LLP files, defends, and recovers deemed export refunds for 200+ AA and EPCG holders, EOU units, and DTA suppliers.

Content is reviewed quarterly for accuracy.

Three distinct domestic-export incentive routes exist in GST. They are routinely confused in practice. The Patron-curated comparison below clarifies each.

Most Common Confusion: Suppliers often think supplying to a merchant exporter at 0.1 percent IGST is a deemed export - it is NOT. Merchant exporter scheme is a concessional rate notification under Section 11 of CGST Act, not under Section 147. The recipient cannot file deemed-export refund - the supplier with accumulated ITC may claim Inverted Duty Structure refund. Conversely, supplies to AA/EPCG/EOU recipients are deemed exports under Section 147 plus Notification 48/2017 - tax is fully payable at applicable rate (not 0.1 percent), and refund is claimed back.

Mandatory Documents (All Categories)

• Tax invoice with full GST (not LUT, not 0.1 percent concessional)
• Recipient's authorisation copy - AA, EPCG, or EOU/EHTP/STP/BTP LOP
• GSTR-1 of relevant period showing deemed export in Table 6C
• GSTR-3B of relevant period showing tax payment
• Statement 5B in RFD-01 prescribed format
• Filer decision memo (supplier vs recipient under Rule 89(1) third proviso)
• Non-filer party's undertaking (no ITC and no refund OR supplier-may-claim-refund)
• Declarations under Rule 89(2)(l) - non-prosecution
• Declarations under Rule 89(2)(m) - tax incidence not passed (CA Certificate above Rs 2 lakh)

For Advance Authorisation (Category 1) and EPCG (Category 2)

• Acknowledgement by jurisdictional GST officer of AA/EPCG holder confirming receipt of deemed export supplies
• AA/EPCG export obligation period and value details
• DGFT EDI / online endorsement reference where applicable

For EOU/EHTP/STP/BTP (Category 3)

• Form A prior intimation by recipient EOU - copies to jurisdictional officers of supplier and recipient and to Development Commissioner (per Circular 14/14/2017-GST)
• Form B record-keeping of receipt, use, and removal maintained by EOU
• Tax invoice copy signed by EOU recipient confirming receipt of deemed export supplies
• EOU LOP and Authorised Operations list

For Gold by Bank/PSU against AA (Category 4)

• Customs Notification 50/2017 reference for the supplying bank/PSU
• AA holder details and DGFT acknowledgement
• Acknowledgement by jurisdictional GST officer of AA holder

All fees and charges listed are indicative only and do not constitute a binding offer. Final amounts may vary depending on the volume of work and the complexity involved.

Professional service charges for drafting, filing, and representation are separate from the statutory fees. The exact fee depends on the complexity of the case, disputed amount, and number of hearings required. Contact us for a detailed quote.

Get a free Deemed Exports Refund consultation - Call +91 945 945 6700 or WhatsApp us. No-obligation assessment.

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Hyundai, Asian Paints, Bridgestone, and 200+ AA holders, EPCG holders, EOU units, and DTA suppliers across pharma, engineering, textile, electronics, and gems and jewellery feeding deemed export supply chains.

Outcome Proof

A Pune engineering component manufacturer recovered Rs 27,00,000 in deemed export refund for FY 2025-26 supplies to a Hyderabad EOU in March 2026. EOU recipient issued no-ITC undertaking enabling supplier-as-filer route. Patron prepared Form A coordination, secured DC acknowledgement, drafted undertaking pack, and filed RFD-01 with full Statement 5B - RFD-04 provisional Rs 24.3 lakh credited in 30 days; RFD-06 balance Rs 2.7 lakh in 70 days end-to-end.

With offices in Pune, Mumbai, Delhi, and Gurugram, Patron Accounting serves AA/EPCG holders, EOU units, and DTA suppliers across India.

Deemed export refund work integrates with Patron's broader GST refund and litigation stack. Explore related services below:

• GST Refund - parent practice covering the full Section 54 refund spectrum, RFD-01 filing, RFD-06 sanction or rejection, and refund category mechanics
• GSTAT Appeal - Exporters (Refund Rejection) - escalation route where deemed export RFD-06 is rejected and APL-04 Order-in-Appeal is also adverse
• GSTAT Appeal Filing - second appeal under Section 112 in Form APL-05 for any refund-related dispute
• GST Notice - covers Section 73, 74, and 74A demand notices and RFD-08 SCN replies before they crystallise into RFD-06 rejection
• GST Audit - Section 65 departmental audit and forensic-style internal audit support for AA/EPCG/EOU compliance
• GST Annual Returns - GSTR-9 and GSTR-9C compliance feeding into refund reconciliation

Section 147 of CGST Act 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.

Notification 48/2017-Central Tax dated 18 October 2017

Notifies four categories of supply of goods as deemed exports under Section 147 - (1) supply of goods by registered person against AA, (2) supply of capital goods by registered person against EPCG, (3) supply of goods by registered person to EOU/EHTP/STP/BTP, (4) supply of gold by bank/PSU specified in Notification 50/2017-Customs against AA.

Notification 49/2017-Central Tax dated 18 October 2017

Prescribes the documentary evidence required for deemed export refund - including jurisdictional officer acknowledgement, signed tax invoice copies, and recipient undertakings.

Rule 89(1) Third Proviso of CGST Rules 2017

In respect of supplies regarded as deemed exports, the application may be filed by - (a) the recipient of deemed export supplies; or (b) the supplier of deemed export supplies in cases where the recipient does not avail of input tax credit on such supplies and furnishes an undertaking to the effect that the supplier may claim the refund.

Rule 89(4A) of CGST Rules 2017

Inserted by Notification 75/2017-Central Tax dated 29 December 2017 with retrospective effect from 23 October 2017. The recipient of deemed export supplies can claim refund of ITC availed in respect of OTHER inputs or input services used in making zero-rated supply of goods or services.

Circular 14/14/2017-GST dated 06 November 2017

Procedure for supplies to EOU/EHTP/STP/BTP units. Form A prior intimation by recipient before procurement - copies to jurisdictional officers of supplier and recipient and to Development Commissioner. Form B record-keeping by recipient for receipt, use, and removal.

Notification 40/2017-Central Tax (Rate) and Notification 41/2017-Integrated Tax (Rate)

Both dated 23 October 2017. Merchant exporter scheme - 0.05 percent CGST plus 0.05 percent SGST for intra-state and 0.1 percent IGST for inter-state supplies to merchant exporters meeting prescribed conditions. SEPARATE from deemed exports under Section 147; refund path is Rule 89(4B) accumulated ITC.

Rule 96(10) of CGST Rules 2017

Bars IGST-paid export refund where supplier availed merchant exporter concessional rate. Exporter must export under LUT only. Frequently relevant when reconciling deemed export vs merchant exporter scheme treatment of the same supply chain.

Section 54(1) and Section 54(7) of CGST Act 2017

Section 54(1) prescribes a 2-year limitation from the relevant date for filing refund applications - for deemed exports, the date when the relevant return is furnished. Section 54(7) requires the proper officer to issue final refund order within 60 days of receipt of complete application. Section 56 interest at 6 percent per annum (9 percent for appellate orders) applies for delays.

Foreign Trade Policy 2015-20 (now FTP 2023)

Chapter 4 defines Advance Authorisation; Chapter 5 defines EPCG; Chapter 6 defines EOU/EHTP/STP/BTP. Definitions imported into Notification 48/2017 by reference.

Deemed export refund deadlines run off Section 54(1), Form A pre-procurement timing, and authorisation export obligation cycles. Missing any of the following deadlines can permanently extinguish your refund right or delay recovery by months:

• Form A prior intimation (EOU) - BEFORE procurement per Circular 14/14/2017-GST; refund rejected if Form A missed
• Refund time limit under Section 54(1) - 2 years from relevant return filing date; permanent loss of refund right beyond limitation
• GSTR-1 Table 6C reporting - by 11th of following month; refund processing blocked without it
• GSTR-3B tax payment - by 20th of following month; cannot file refund without tax discharge
• AA/EPCG export obligation period - per FTP and authorisation conditions; underlying authorisation may be revoked
• RFD-02 acknowledgement - within 15 days of RFD-01 (Rule 90(2)); escalate via grievance under Rule 90 if delayed
• RFD-04 90 percent provisional sanction - within 7 days of RFD-02 (low-risk); officer must record reasons in writing if withheld
• RFD-06 final sanction - within 60 days of RFD-02 (Section 54(7)); 6 percent interest under Section 56 if delayed
• Section 107 appeal - within 3 months of RFD-06 refund rejection; 10 percent pre-deposit required

Engage Patron Accounting before EOU procurement for full Form A discipline, or share AA/EPCG/LOP copy and last 3 months invoices for free categorisation diagnostic. Call +91 945 945 6700 or WhatsApp us now.

Deemed exports under Section 147 of the CGST Act 2017 read with Notification 48/2017-Central Tax dated 18 October 2017 are the GST law's mechanism for ensuring tax neutrality on domestic supplies feeding the export-linked supply chain - Advance Authorisation holders (FTP Chapter 4), EPCG capital goods recipients (FTP Chapter 5), EOU/EHTP/STP/BTP units (FTP Chapter 6), and gold supplied by banks or PSUs against AA. Unlike zero-rated supplies under Section 16 of IGST Act 2017, deemed exports cannot be made under LUT or Bond - GST must be paid at the applicable rate at time of supply, and the refund is claimed afterwards.

The unique procedural feature is the either-supplier-or-recipient filing right under Rule 89(1) third proviso of CGST Rules 2017 - no other refund category has this. Notification 49/2017-Central Tax prescribes the documentary evidence; Circular 14/14/2017-GST sets the Form A prior intimation procedure for EOU/EHTP/STP/BTP recipients. Rule 89(4A) gives the recipient a companion refund right for OTHER inputs ITC used in zero-rated supplies. The merchant exporter 0.1 percent scheme under Notifications 40/2017-Central Tax (Rate) and 41/2017-Integrated Tax (Rate) dated 23 October 2017 is a SEPARATE concessional rate regime, not a deemed export - misclassifying the two is the most common source of failed refund claims.

Patron Accounting LLP brings 15+ years of Section 147 deemed exports, Notification 48/2017 categorisation, FTP Chapters 4 to 6 compliance, Form A coordination, jurisdictional officer endorsement liaison, and Rule 89(4A) and 89(4B) refund experience for 200+ AA holders, EPCG holders, EOU units, and DTA suppliers across pharma, engineering, textile, electronics, and gems and jewellery, with four physical offices in Pune, Mumbai, Delhi, and Gurugram. Suppliers and recipients gain CA-led categorisation discipline, optimal filer recommendation, complete Notification 49/2017 evidence pack, Form A coordination, and merchant exporter scheme advisory where applicable.