Deemed Export Under GST: Rules, Rates & Refund
TL;DR - Summary
- What is deemed export under GST? - Deemed exports are government-approved domestic supplies of Indian-made goods. The goods stay in India, but the tax paid on them may be refunded under goods and services tax (GST) rules.
- Which supplies are notified as deemed exports under GST? - The four groups cover qualifying supplies against Advance Authorisation (AA), capital goods against Export Promotion Capital Goods (EPCG) Authorisation, goods supplied to approved Export Oriented Units (EOUs), including eligible technology-park units, and specified gold supplies against AA.
- What GST rate applies, and how are deemed exports different from physical exports? - Deemed exports carry the GST rate for the goods, with a refund available if the conditions are met. Physical exports are zero-rated and can qualify for supply without paying GST upfront.
- Who can claim the refund, and how? - Either the supplier or the recipient can apply online using Form GST RFD-01 and the required documents. Both cannot claim a refund for the same supply.
What Is Deemed Export Under GST?
Deemed exports are certain domestic supplies of Indian-made goods that qualify for a refund of the GST paid. The goods stay in India. To qualify, the supply must belong to one of the government-approved categories and meet its conditions.
The idea is to help eligible businesses recover the GST paid on these domestic purchases. Selling to an exporter is not enough on its own. Your transaction must qualify under one of the four categories below.
For example, a manufacturer in Pune sells electronic components worth ₹10 lakh to an EOU in Chennai. The goods stay in India. If the supply meets the EOU category’s conditions, the supplier or the EOU can apply for a refund of the GST paid.
The refund is not automatic. Both parties need the right documents and must agree on who will apply, so the same tax is not refunded twice.
Which Supplies Are Notified as Deemed Exports?
Four types of domestic goods supplies can qualify as deemed exports under GST, as listed below. The goods must be manufactured in India and stay within the country. Payment can be received in Indian rupees or convertible foreign currency.
- Supply Against Advance Authorisation (AA): AA lets eligible exporters import or buy inputs in India to make goods for export. Domestic purchases under a qualifying AA can count as deemed exports. There is an extra condition if the exports have already happened and input tax credit (ITC) was claimed on the inputs used: the new goods must be used to make and sell taxable goods, not nil-rated or fully exempt goods. A chartered accountant must certify this, and the certificate must be submitted to the GST commissioner or authorized officer handling the claim within six months of the supply. No certificate is needed if that ITC was not claimed.
- Supply of Capital Goods Under EPCG Authorisation: The EPCG scheme helps exporters buy eligible machinery and other capital goods for export production. Domestic supplies against a qualifying EPCG Authorisation can count as deemed exports.
- Supply to EOUs, EHTPs, STPs and BTPs: Goods supplied to approved EOUs can qualify. This includes eligible Electronic Hardware Technology Park (EHTP), Software Technology Park (STP), and Bio-Technology Park (BTP) units. Before buying, the unit must send Form A to the supplier and the GST officers responsible for both parties, listing goods pre-approved by the Development Commissioner. After delivery, it must sign the invoice to confirm receipt and send copies to the same parties. It must also keep digital Form B records with a history of changes and send each month’s record to its GST officer by the 10th of the next month.
- Supply of Gold Against AA: Gold supplied against a qualifying AA can count as a deemed export, but only when the supplier is a bank or public sector undertaking approved for this purpose.
GST must be paid on these supplies before a refund can be claimed. You cannot use a Letter of Undertaking (LUT) or bond to supply deemed-export goods without paying tax. Each category also has its own conditions, so check these before you invoice.
💡 QUICK INSIGHT
Deemed exports cover qualifying goods made in India, not imported goods or services. A reseller can qualify too, but the goods and the supply must meet the same conditions.
Related: Export promotion schemes
How Is Deemed Export Different from Physical Export and SEZ Supply?
The key difference is when GST is paid and how it is recovered. Deemed-export goods stay in India and carry GST. Physical exports and supplies for approved operations in a Special Economic Zone (SEZ) qualify for zero-rated treatment. Here is how the routes compare.
| Feature | Deemed Export | Physical Export / SEZ Supply |
|---|---|---|
| Goods movement | Goods remain within India and do not physically leave the country. | Goods leave India for physical exports or are supplied to an SEZ unit or developer for authorized operations. |
| GST payment | GST must be paid at the applicable rate. | Eligible suppliers can use an LUT or bond to supply without paying Integrated Goods and Services Tax (IGST). Payment-and-refund routes are also available where permitted. |
| LUT/Bond facility | No. GST must be paid before claiming the deemed-export refund. | Yes, for eligible zero-rated supplies. |
| Refund mechanism | Refund of the GST paid, if the supply and claim qualify. | Refund of unused ITC when supplied without paying IGST, or a refund of IGST paid where that route is allowed. |
| Who claims the refund? | Either the supplier or the recipient, but not both for the same supply. | The supplier, using the relevant export or SEZ refund process. |
| Supporting documents | GST invoices, proof of receipt, required declarations and other documents supporting the claim. | Shipping bill and export documentation for physical exports; endorsed tax invoices and evidence of authorized operations for SEZ supplies, as applicable. |
Physical exports and supplies for approved SEZ operations are zero-rated. Eligible suppliers can use a Letter of Undertaking (LUT) or bond to avoid paying IGST upfront. Where the payment-and-refund route is allowed, they can instead pay IGST and apply to recover it.
For deemed exports, GST is paid first. The supplier or recipient can then apply for a refund. Calling a supply a deemed export does not make it zero-rated or allow it to be supplied tax-free under an LUT.
This matters when you file your returns. Reporting deemed exports as zero-rated supplies puts them in the wrong place in GSTR-3B and can delay the refund. Use the correct category and keep the documents that support your claim.
For related guidance, read export of services under GST.
How Is GST Applied on Deemed Export Supplies?
Charge the GST rate that applies to the goods you sell. This depends on their Harmonized System of Nomenclature (HSN) classification. Issue a tax invoice with GST, pay the tax, and then apply for a refund if the supply qualifies. Deemed-export status does not let you skip the tax payment.
Here is what to check before invoicing and filing:
- GST rate: Check the rate for the goods and their HSN classification. Deemed-export status does not give every product a lower rate.
- Tax invoice and payment: Issue a regular GST invoice and charge the applicable tax. An LUT or bond cannot be used to avoid this payment.
- Refund of GST paid: Decide whether the supplier or recipient will apply. Only one can claim for the same supply, and the credit and document conditions must be met.
- GST registration: Suppliers in the AA, EPCG and EOU categories must be registered. Use the recipient’s Goods and Services Tax Identification Number (GSTIN), and check that both parties meet the registration and refund-filing requirements.
- GSTR-1 reporting: Report deemed export supplies in Table 6C of GSTR-1, including the recipient's GSTIN, invoice number, invoice date, taxable value, and applicable tax details.
- GSTR-3B reporting: Include the taxable value and tax in Table 3.1(a), for outward taxable supplies.
✅ PRO TIP
Check the HSN classification and GST rate before invoicing. Getting these right helps avoid refund queries later. Skydo’s guide to e-invoicing under GST explains when e-invoicing applies to your business.
Who Can Claim the Refund on Deemed Exports, Supplier or Recipient?
Either the supplier or the recipient can claim the refund, but not both. Agree on who will apply before filing, then prepare the documents for that route. The main difference is how the recipient handles the tax credit.
When the Supplier Claims the Refund
The supplier can apply only if the recipient has not claimed ITC on those supplies. The recipient must give a written undertaking confirming this, agreeing not to claim the refund, and allowing the supplier to apply.
Apply using Form GST RFD-01. Attach Statement 5B, the invoices, proof that the goods were received, and the recipient’s undertakings. If approved, the refund goes to the supplier.
This route helps the supplier recover the tax paid rather than leave that money tied up in the transaction.
When the Recipient Claims the Refund
The recipient can apply after paying the invoice, including GST. It files Form GST RFD-01 with Statement 5B and the required declarations, including confirmation that the supplier has not claimed and will not claim the same refund.
For this route, the recipient takes credit of the tax paid so it can claim the refund through the GST portal. The portal then deducts the refund amount from its electronic credit ledger. This credit is only for the deemed-export refund process. It must not also be counted in “Net ITC,” the credit used to calculate refunds for zero-rated supplies or an inverted duty structure, where input tax rates are higher than output tax rates.
This route may suit EOUs that want to manage their own refunds. The supplier cannot claim again, and the recipient still needs the documents and return details to support its application.
Practical Example: Who Should Claim and What Does Each Party Get?
Suppose a Pune-based electronics manufacturer supplies components worth ₹10 lakh to an eligible Export Oriented Unit (EOU) in Chennai. At an illustrative GST rate of 18%, the invoice includes ₹1.8 lakh in GST, bringing the total invoice value to ₹11.8 lakh.
- If the supplier claims the refund: The EOU pays ₹11.8 lakh and gives the supplier a written undertaking that it has not claimed ITC and will not claim the refund. The supplier applies using Form GST RFD-01, Statement 5B, the invoices and supporting documents. If approved, the supplier receives ₹1.8 lakh. The EOU cannot claim ITC on those purchases.
- If the EOU claims the refund: The EOU pays ₹11.8 lakh and submits its own application with Statement 5B and the required declarations. It takes ₹1.8 lakh as credit for the refund process, and that amount is deducted from its electronic credit ledger when it files. It cannot also use the same tax amount to pay output GST or claim another refund. If approved, the EOU receives ₹1.8 lakh. The supplier cannot claim it again.
Choose the refund route before filing and record the agreement in writing. Coordinating the declarations upfront helps avoid duplicate claims, disputes and delays.
For additional guidance on remittance documentation and export-related tax requirements, read FIRA and GST refunds for SaaS exporters and claiming export incentives in India.
How to Claim a Refund for Deemed Exports: Step-by-Step
Claim a refund for deemed exports
Apply with Form GST RFD-01, within two years of the return filing date. Hover or tap each step.
List each supply: GSTIN, invoice number and date, taxable value, tax. Recipients match it to the supplier's GSTR-1 or GSTR-1A. Invoice-based, so no tax period.
AA or EPCG: get the recipient's GST officer confirmation of receipt. EOU: keep the signed invoice, plus Form A and Form B.
Attach the invoices and receipt proof, matching Statement 5B and both parties' records.
Written confirmation that the other party has not claimed, and will not claim, the ITC or refund, with the required declarations.
GST portal: Services, Refunds, Application for Refund. Pick your category, upload Statement 5B and documents, submit. Save the ARN.
The officer reviews it. Reply fast if asked for more. Once approved, the refund is paid.
Apply online using Form GST RFD-01 and attach the documents for your chosen route. You generally have two years from the date the return covering the deemed-export supplies was filed, not from the invoice date. Here is what to prepare.
- Step 1: Prepare Statement 5B: List the supplies you are claiming for, with the required GSTINs, invoice or other document numbers and dates, taxable values, and tax amounts. Suppliers list their sales; recipients list their purchases. Recipients should match the entries to the supplier’s filed GSTR-1 or GSTR-1A. Their application is invoice-based, so no tax-period selection is needed.
- Step 2: Obtain the Required Acknowledgement: If you are a supplier claiming against AA or EPCG Authorisation, get confirmation of receipt from the recipient’s GST officer. For EOU supplies, keep the invoice signed by the recipient to confirm delivery. Follow the Form A and Form B steps described above for EOUs and eligible technology-park units.
- Step 3: Attach the Supporting Tax Invoices: Attach the invoices and receipt evidence needed for your claim. Make sure the details match Statement 5B and both parties’ records.
- Step 4: Provide the Required Undertaking: For a supplier’s claim, get the recipient’s written confirmation that it has not claimed ITC, will not claim the refund, and allows the supplier to apply. For a recipient’s claim, confirm that the supplier has not claimed and will not claim the refund, and include the other required declarations.
- Step 5: Submit Form GST RFD-01: On the GST portal, go to Services → Refunds → Application for Refund. Choose the deemed-export refund category for your role as supplier or recipient. Complete the form, upload Statement 5B and the supporting documents, and submit. Save the Application Reference Number (ARN) to track your claim.
- Step 6: Respond to Verification and Receive the Refund: Your GST officer checks the application and documents. Respond promptly if more details are requested. Once the claim is approved, the refund is processed for payment.
⚠️ WATCH OUT
: Count the two-year filing window from the date you filed the return covering these supplies, not the invoice date. Track it early so you do not miss the refund deadline.
For additional guidance, read export obligation period and the DGFT guide for Indian exporters.
What Are the Reporting Requirements in GSTR-1 and GSTR-3B?
Report deemed exports in both GSTR-1 and GSTR-3B. GSTR-1 records the invoices; GSTR-3B reports the taxable value and tax due. The details should match. Differences can lead to questions, refund delays or rejection.
GSTR-1 Reporting
Use Table 6C of GSTR-1 for deemed-export invoices. Enter the recipient’s GSTIN, invoice number and date, invoice value, taxable value and tax amounts. Use Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) for supplies within a state, or IGST for supplies between states, as applicable. Check these details against your invoices before filing.
GSTR-3B Reporting
Use Table 3.1(a) of GSTR-3B, labeled “Outward taxable supplies (other than zero-rated, nil-rated and exempted).” Enter the taxable value and the tax due under the correct IGST, CGST and SGST heads.
Do not use Table 3.1(b), which is for zero-rated supplies. A deemed-export refund does not change the supply’s category. Check the portal instructions for the return period you are filing.
Amendment Reporting
To correct a previously reported deemed-export invoice, use Table 9A of GSTR-1 for business-to-business (B2B) invoice amendments. Use Table 9C to amend credit or debit notes issued to registered recipients. Match each correction to the invoice or note and your supporting records.
Why Consistency Between Returns Matters
Match the deemed-export figures in GSTR-1 Table 6C with the related taxable value and tax in GSTR-3B Table 3.1(a). Fix differences before filing. This helps avoid extra checks and keeps your refund from being delayed by reporting errors.
Businesses using e-invoicing should also verify that invoice data is accurately reflected in their GST returns. Following the applicable e-invoicing requirements under GST and reconciling both returns before filing can help reduce reporting errors and avoidable refund delays.
Is the 0.1% concessional GST rate applicable to deemed exports?
No, deemed-export status does not automatically give you the 0.1% rate. That concession belongs to a separate scheme for eligible sales to registered exporters and has its own conditions. Charge the usual GST rate for your goods unless the transaction separately qualifies for a lower rate.
Can a supplier claim a GST refund on deemed exports if the recipient claims ITC?
What is the time limit for claiming a GST refund on deemed exports?
Are services covered under deemed exports under GST?
