Deemed Exports Under GST: Meaning, Categories, Refund Process, and FTP Rules

What Is a Deemed Export Under GST?

Section 147 of the CGST Act allows the Central Government to notify specific supplies of goods as deemed exports even though the goods do not leave India . For a supply to fall within this framework:

• It must involve goods, not services.
• The goods must be manufactured or produced in India.
• Payment may be received in Indian rupees or convertible foreign exchange.
• The supply must belong to a category specifically notified by the Government.

The four categories currently recognized for GST purposes are listed in Notification No. 48/2017-Central Tax , dated 18 October 2017.

These are taxable domestic supplies . The supplier issues a tax invoice, pays the applicable GST, and reports the liability in its returns. The eligible supplier or recipient may then claim a refund through Form GST RFD-01.

Which Supplies Qualify Under Notification No. 48/2017?

1. Goods Supplied Against Advance Authorisation

A supply of goods by a registered person against a valid Advance Authorization may qualify . Before treating the invoice as an eligible notified supply, verify that:

• The recipient holds a valid advance authorization.
• The goods supplied are covered by that authorization.
• The quantity and description match the authorization documents.
• The supply can be linked to the relevant authorization.
• The prescribed receipt evidence can be obtained.

A normal sale to an exporter does not qualify merely because the recipient later uses the goods to manufacture an exported product.

2. Capital Goods Supplied Against EPCG Authorization

Capital goods supplied by a registered person against an Export Promotion Capital Goods Authorization are also covered. The supplier should verify the machinery or equipment description, quantity, and authorization details before dispatch. Goods not covered by the EPCG Authorization should not be included in the refund claim merely because the buyer holds an EPCG license.

3. Goods Supplied to an EOU, EHTP, STP, or BTP Unit

Goods supplied by a registered person to an approved Export Oriented Unit are covered. For this purpose, the term includes:

• Export-Oriented Units
• Electronic Hardware Technology Park units
• Software Technology Park units
• Bio-Technology Park units

4. Gold Supplied by a Specified Bank or PSU

Gold supplied against an Advance Authorization may qualify where the supplier is a bank or Public Sector Undertaking specified under Notification No. 50/2017-Customs , as amended.

This category does not cover all banks or PSUs. The supplier must be covered by the customs notification, and the gold must be supplied against the relevant Advance Authorisation.

Note: Do not rely only on the customer’s statement that the purchase qualifies. Obtain and verify the relevant authorization or approval before issuing the invoice.

A domestic supply does not become zero-rated merely because it supports an export business. Section 147 creates a separate tax-paid refund route for specifically notified transactions.

Who Can Claim the GST Refund?

Either the supplier or the recipient may file the refund application, but only one party can claim the refund for a given invoice. The parties should designate the claimant at the purchase order or contract stage so that the ITC treatment and undertakings remain consistent.

When the Supplier Claims

The recipient must confirm that:

• It has not availed ITC on the relevant invoices.
• It has not claimed and will not claim the refund.
• The supplier may claim the refund.

These undertakings should be retained with the authorization, invoices, and receipt evidence. Notification No. 49/2017-Central Tax also requires the prescribed evidence of receipt where the supplier files the claim.

When the Recipient Claims

The supplier must confirm that it has not claimed and will not claim a refund against the same invoices.

Circular No. 147/03/2021-GST clarified that the recipient may avail the tax amount as ITC when filing the refund claim. An equivalent amount must be debited from the recipient’s electronic credit ledger . The claimed refund cannot exceed the ITC availed under the valid return for the relevant period.

Special Procedure for Supplies to EOU, EHTP, STP, and BTP Units

Circular No. 14/14/2017-GST prescribes a separate document trail for goods supplied to EOU, EHTP, STP, and BTP units.

Note: Circular No. 14/14/2017-GST refers to submitting the monthly Form B record through a CD or pen drive. Since this procedure was issued in 2017, the recipient should confirm the currently accepted electronic submission method with its jurisdictional GST officer.

How to Report the Supply in GSTR-1 and GSTR-3B

GSTR-1 Reporting

Select the relevant deemed export option when reporting the invoice or related note in GSTR-1.

GSTR-3B Reporting

Report the taxable value and corresponding tax liability in Table 3.1(a) of GSTR-3B. Do not report the transaction in Table 3.1(b). Table 3.1(b) covers zero-rated exports and supplies to SEZ units or developers, while deemed exports are taxable domestic supplies.

The GST Portal’s liability-comparison guidance maps GSTR-1 Table 6C to GSTR-3B Table 3.1(a). Therefore, the invoice values and tax amounts in GSTR-1, GSTR-3B, and Statement 5B should be reconciled before filing the refund application.

Where the liability declared in GSTR-1 or IFF exceeds the liability reported in GSTR-3B by more than the system-defined limit, the portal may issue an intimation in Form GST DRC-01B . The taxpayer must pay or explain the difference through Part B within seven days. Failure to respond can block the filing of GSTR-1 or IFF for a subsequent period.

How to Claim the Refund Through Form GST RFD-01

Documents Required

The documents depend on the category and the person filing the claim.

For supplier-filed claims involving Advance Authorisation or EPCG Authorisation, Notification No. 49/2017 requires an acknowledgement from the jurisdictional tax officer of the authorization holder that the goods were received. For goods supplied to an EOU, the signed and endorsed tax invoice serves as the prescribed evidence of receipt.

Proof That the Tax Burden Has Not Been Passed On

Circular No. 125/44/2019-GST includes the following requirement for supplier-side and recipient-side claims:

●     A self-declaration under Rule 89(2)(l) where the refund amount does not exceed ₹2 lakh.

●     The prescribed certificate under Rule 89(2)(m), from a Chartered Accountant or Cost Accountant, where the amount exceeds ₹2 lakh.

This document is separate from the undertaking that prevents the other party from claiming the same refund.

File Form GST RFD-01

After confirming eligibility, completing the required GST return reporting, and collecting the documents listed above, file the refund application on the GST Portal through:

Services > Refunds > Application for Refund

Select the appropriate refund category for the supplier or recipient, complete Statement 5B, and upload the supporting documents. Verify the invoice values, tax heads, GSTINs, and credit or debit note adjustments before submission.

Submit the application using DSC or EVC, as applicable. Retain the ARN, submitted RFD-01, Statement 5B, and uploaded documents for tracking and future verification.

Refund Processing Time

A complete refund application should ordinarily be processed within 60 days of receipt. The timeline may extend where the officer issues a deficiency memo, seeks clarification, or proposes partial or complete rejection. If an admissible refund is not issued within the prescribed period, interest may become payable under Section 56 of the CGST Act.

Refund Filing Time Limit

The refund application must generally be filed within 2 years of the date the supplier furnished the GST return for the relevant supplies. This deadline applies even when the recipient files the claim.

For example, if the supplier files the relevant return on 20 August 2026, the refund application should be filed on or before 20 August 2028. The deadline is not calculated from the recipient’s return date, payment date, or the date on which the supporting documents are collected.

GST Deemed Exports vs FTP Deemed Exports

GST law and the Foreign Trade Policy use similar terminology, but they do not cover the same transactions or benefits.

Why the Two Frameworks Are Different

A transaction may qualify under FTP Chapter 7 but not under Section 147 of the CGST Act. DGFT recognition does not automatically create a GST refund right. FTP 2023 expressly makes its benefits subject to the relevant Handbook of Procedures and ANF-7A conditions.

How FTP Benefits Are Claimed in 2026

DGFT’s Deemed Export Module User Help File Version 4.0, dated February 2026, covers the online ANF-7A process. An applicant generally requires:

• An active DGFT Portal account
• Authority to file for the relevant IEC
• An IEC that is not cancelled or suspended
• Aadhaar-based e-sign or DSC
• PFMS-validated bank details
• Documents prescribed for the selected benefit

The online application is available through: Services > Deemed Exports > Apply for Refund for TED/DBK/Brand Rate Fixation

The application may be filed by either the supplier or the recipient, depending on the relevant FTP category and the supporting disclaimer.

FTP Claim Route for Supplies to an EOU

For goods supplied to an EOU:

• The DTA supplier generally claims the applicable FTP benefit from its jurisdictional Regional Authority.
• Where the supplier has not claimed the benefit, the recipient EOU may apply to its jurisdictional Development Commissioner under Appendix 6J.

The non-claiming party’s disclaimer should be retained to prevent duplicate benefit claims.

FTP Filing Deadlines

The GST two-year limitation does not apply to an ANF-7A claim. For supplies covered by FTP Paragraph 7.02(a) to (c), an application for applicable terminal excise duty refund or drawback may generally be filed:

• Within 12 months from the realization of 100% payment, or
• Within 12 months from the last date of supply, where payment was received in advance.

For supplies covered by Paragraph 7.02(d) to (g), the 12-month period may run from the date the project authority receives the goods or the date the supplier receives payment, depending on the option selected by the applicant.

One ANF-7A application cannot combine supplies belonging to multiple categories under FTP Paragraph 7.02.

2026 DGFT Document-Submission Conflict

The current Chapter 7 of the Handbook of Procedures states that documents are uploaded online and that no physical copy of the application is required to be submitted to the Regional Authority.

However, DGFT’s February 2026 Deemed Export Module User Help File still contains an instruction asking applicants to submit physical copies of documents to the relevant Regional Authority within seven days of file generation.

Because two current official DGFT documents are inconsistent on this point, applicants should confirm the accepted practice with their jurisdictional Regional Authority before filing.

Common Errors That Can Delay a Refund Claim

Mismatched Invoice Details

Check previous and pending refund applications before adding invoices to Statement 5B.

Uploading the Same Invoice More Than Once

Mixing Different Authorisations

Maintain a clear invoice-wise link between each supply and the relevant Advance Authorisation, EPCG Authorisation or EOU approval.

Waiting Until the Deadline

Complete the reconciliation and document collection well before the applicable GST or FTP filing deadline.

How BUSY Helps Maintain a Clear Refund Trail

A deemed export refund requires invoice details, tax values, return data, and inventory records to remain consistent. Depending on the edition and configuration used, BUSY accounting software can help businesses maintain GST invoices, credit and debit notes, inventory records, e-invoices, e-way bills, and GST return data in a single system.

This makes it easier for accounts teams to compare invoice details with filed GST returns, account for later adjustments and trace each supply to the relevant transaction records.

BUSY supports the accounting and reconciliation process. The legal eligibility of the supply, claimant selection, ITC treatment, supporting documents, and any FTP benefit should still be reviewed by a qualified tax professional before filing.

Conclusion

A deemed export refund requires correct classification before supply and a traceable record from the authorisation and invoice through to the GST returns, receipt evidence, and RFD-01 application. GST and FTP claims should be handled separately, with each claim filed under its own eligibility conditions, documentation requirements, and deadline.