What is considered export?
Exports considered simply mean some type of transactions in which the goods supplied do not leave India, but are treated as exports under the foreign trade policy (FTP) and the GST law. Unlike common exports, where goods are exported outside the country, exports are considered within the geospatial limits of India, provided that goods are manufactured in India.
The legal disposition for exports considered is contained in:
- Foreign Trade Policy (FTP) 2015-20, Chapter 7
- Assets and Services Tax Structure (GST), particularly section 147 of the CGST Law, 2017.
Difference of the usual export:
In conventional exports, the goods move through the national border and, in general, the payment is received in a foreign currency. In the exports considered, the basic products are still within India, and the payment could be received in the Indian rupees (INR) or the currencies after the RBI standards. But exports considered still eligible for several export incentives.
Why was the concept of exports considered? – What is the goal?
The concept of Exports considered It was introduced to support national manufacturing through the treatment of certain supplies within India as if they were exports, despite the fact that the goods do not leave the country. This policy measure helps to ensure that national suppliers receive benefits similar to physical exporters.
Aim:
The main objective of exports considered is to provide a level of level play to national manufacturers and promote the ‘Make in India’ initiative. It ensures that Indian suppliers are not at a disadvantage compared to foreign suppliers, especially in projects backed by the Government or internationally financed. The government notifies specific cases and sectors eligible for such benefits from time to time.
Examples of exports considered
Exports considered refer to transactions where the goods supplied do not abandon India, but exports are still considered under foreign trade policy. These supplies are eligible for export benefits, such as the inconvenience of taxes, GST reimbursements and exemptions. Below are some real life examples:
1. Supply to export -oriented units (EOUS), EHTP, STP and BTP Units
A national manufacturer that supplies components to an export -oriented unit (Eou) dedicated to the production of electronic goods for export is making a considered export. Although the goods remain within India, the offer supports exports production and qualifies for benefits such as the inconvenience of GST tax and reimbursements.
2. Supply under early authorization
A textile company that acquires dyes and chemicals from a national provider under an early authorization scheme to manufacture export garments is dedicated to an export transaction considered. The supplier can claim a reimbursement of the GST paid in these supplies.
[Learn More about Advance Authorisation Scheme]
3. Supply of capital goods under the EPCG scheme
The supply of capital goods as machinery to an exporter under the scheme of export promotion capital (EPCG) qualifies as an export considered. This facilitates technology updates for exporters, and the supplier is eligible for benefits such as GST reimbursements.
[Learn More about EPCG Scheme]
4. Supply to projects financed by multilateral or bilateral agencies
The supply of goods to infrastructure projects in India financed by international agencies such as the World Bank or the Asian Development Bank is considered an export considered. These projects often follow international tender procedures (ICB), and suppliers can take advantage of benefits as the inconvenience of GST taxes and reimbursements.
5. Supply to Mega Energy Projects
The supply of products necessary to establish mega energy projects, as specified in DGFT notifications, is treated as an export considered. For example, the supply of equipment to an energy project that has followed the ICB procedures and is listed under the relevant customs notifications qualifies for the export benefits considered.
Types of eligible transactions as exports considered
- Supplies to export -oriented units (EOUS)
- Supplies to advance authorization holders
- Supplies to projects under bilateral/multilateral funds
- Supplies to atomic energy projects
All these categories are required to follow the guidelines given by the DGFT and GST authorities.
There are a number of transactions that are classified as exports considered under Indian commercial regulations. The following are some typical examples:
Supply to export -oriented units EOUS / STP / EHTP / BTP:
The export benefits considered extend to the supplies made to the EOUS, STP, EHTP and BTP units to boost export -directed manufacturing.
SUPPLY FOR THE PRODUCT OF ADVANCE / ANNUAL ANTITIONAL LICENSE:
Supplies made under early authorization or annual anticipation license are treated as exports considered to support tax -free acquisition for export production.
Supply of capital goods against the authorization of EPCG:
Capital goods supplied under the EPCG scheme qualify as exports considered, facilitating technology updates for exporters.
Supply to projects financed by the UN/World Bank:
Supplies to projects financed by foreign agencies such as the United Nations, the World Bank or other bilateral/multilateral organizations are considered exports considered.
Supply to nuclear energy projects:
Supplies to nuclear projects are included in the conditions specified by the Government.
Other instances according to DGFT notifications:
The specified supplies of cement, steel and fuel are also eligible for exports considered, together with certain refineries and energy projects notified by the Director General of Foreign Trade (DGFT). Also the supplies of goods for projects financed by bilateral or multilateral agencies notified by the Department of Economic Affairs, Ministry of Finance under International Competitive Tender (ICB), are also considered exports considered.
Main advantages of exports considered under the Indian Foreign Law Law
Exports considered provide a series of incentives comparable to physical exports:
1. Eligibility for early authorization/dfia
Suppliers / manufacturers can import goods without paying customs duty under the authorization of tax free import (DFIA) and early authorization schemes. This guarantees the availability of raw materials at reasonable prices, improving competitiveness.
2. GST reimbursement/exemption in entries
GST loaded in the inputs used in export supplies considered is reimbursable. Alternatively, in certain cases, the exemption of GST’s payment is allowed at the acquisition point itself.
3. Export unbrecking considered
Suppliers have the right to claim tax decline according to all industry duty rates, provided that the provider of goods of taxable goods or at the base of the brand rate has not been used.
4. Special Terminal Tax Refund
The supplier or the recipient is eligible to claim the reimbursement provided that the recipient of the goods does not take advantage of the credit/reimbursement of said assets.
Export considered in front of export vs. export of merchants
Let’s make a clear difference between them:
What is export?
Export refers to the supply of goods physically outside the limits of India. For example, shipping of clothing to the United States.
What is considered export?
Here, goods outside India are not exported, but the offer is treated as an export for commercial benefit purposes. Example: Machinery supply to a project funded by the World Bank in India.
What is the export of merchants?
Commercial export implies buying products from the domestic market and exporting them without making manufacturing activities. For example, buy craftsmen and export them to Europe.
#Meaning #eligibility #benefits #Affo
