Published 18 October 2026
A manufacturer who sells raw material to an exporter holding an advance authorisation, or machinery to an EPCG holder, or goods to an export-oriented unit, has not exported anything. The goods stay in India, and GST is charged on the invoice at the normal rate. The law nonetheless treats some of these supplies as “deemed exports” and allows the tax on them to be refunded. Either the supplier or the buyer may claim it, but not both. Which of them claims decides who gives which undertaking, whose credit ledger is debited, and whose return starts the two-year clock. Errors in that choice are the commonest reason such claims fail.
This guide covers the supplies notified as deemed exports, who may claim the refund and on what evidence, the EOU procedure, the time limit, and the portal steps for each claimant. The general RFD-01 procedure is in Refund of Unutilised Credit: Who Can Claim and How.
What a deemed export is
Section 147 allows the Government to “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”. It applies only to goods, and only to goods manufactured in India.
Notification No. 48/2017-Central Tax (18 October 2017) notifies four supplies:
| No. | Supply |
|---|---|
| 1 | “Supply of goods by a registered person against Advance Authorisation” |
| 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 … against Advance Authorisation” |
The Explanation defines the authorisations by reference to chapters 4, 5 and 6 of the Foreign Trade Policy 2015-20. “Export Oriented Unit” includes EHTP, STP and BTP units.
Notification No. 1/2019-Central Tax (15 January 2019) made two changes to entry 1:
- It removed the words “on pre-import basis” from the meaning of advance authorisation.
- It added a proviso. Where exports have already been made after taking credit on the inputs used in them, the goods supplied against the authorisation must be “used in manufacture and supply of taxable goods (other than nil rated or fully exempted goods)”. A chartered accountant’s certificate to that effect is then submitted to the jurisdictional Commissioner “within 6 months of such supply”. No certificate is needed “if input tax credit has not been availed on inputs used in manufacture of export goods”.
What deemed exports are not. Supplies to an SEZ unit or developer are zero-rated supplies under section 16 of the IGST Act, not deemed exports. Supplies to a merchant exporter at 0.05 or 0.1 per cent under Notification No. 40/2017-Central Tax (Rate) and 41/2017-Integrated Tax (Rate) are concessional supplies, not deemed exports. Circular No. 125/44/2019-GST para 59 says that the supplier at the concessional rate may claim an inverted duty refund, and the merchant exporter “can export the goods only under LUT / bond”.
The tax is charged, then refunded
A deemed export is a taxable supply. The supplier issues a tax invoice and pays the tax. Explanation 1 to section 54 includes in “refund” the “refund of tax on the supply of goods regarded as deemed exports”. This is a refund of tax paid, so:
- Unjust enrichment applies. Deemed exports are not among the refunds in section 54(8)(a) to (d). Annexure A to Circular No. 125/44/2019-GST requires the self-declaration under rule 89(2)(l) for claims up to Rs 2 lakh, and a chartered accountant’s or cost accountant’s certificate under rule 89(2)(m) above that, for both supplier and recipient claims.
- No provisional refund. Section 54(6) provides the 90 per cent provisional refund for zero-rated supplies. Deemed exports are not zero-rated, and the provisional route does not apply.
- Cash and credit together. Rule 92(1A) requires a refund of tax to be split between cash and re-credit in proportion to how the tax was paid. It expressly excludes “zero-rated supplies or deemed export”. A deemed export refund is therefore not split into a cash portion and a re-credit under that sub-rule. It is sanctioned in RFD-06 under rule 92(1) and paid by RFD-05.
Who may claim: supplier or recipient
The proviso to rule 89(1) on deemed exports (still called the “third proviso” in older circulars) reads:
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
When the supplier claims. Notification No. 49/2017-Central Tax specifies the evidence under rule 89(2)(g):
- Acknowledgement by the jurisdictional tax officer of the advance authorisation or EPCG holder that the supplies were received, or, for an EOU, a copy of the tax invoice “duly signed by the recipient Export Oriented Unit”.
- An undertaking by the recipient “that no input tax credit on such supplies has been availed of by him”.
- An undertaking by the recipient “that he shall not claim the refund in respect of such supplies and the supplier may claim the refund”.
When the recipient claims. Circular No. 125/44/2019-GST para 41 originally required the recipient to undertake that it had not taken credit. Circular No. 147/03/2021-GST (12 March 2021) removed that condition. It noted that the rule contains no such restriction, and that “the portal allows refund of only Input Tax Credit (ITC) to the recipients which is required to be debited by the claimant while filing application for refund claim”. As modified, para 41 requires the recipient to undertake that the refund is claimed only for invoices in Statement 5B and “the amount does not exceed the amount of input tax credit availed in the valid return filed for the said tax period”. The recipient also declares “that the supplier has not claimed refund with respect to the said supplies”.
The result is a mirror image. If the supplier claims, the recipient takes no credit. If the recipient claims, it takes the credit first and the claim debits its credit ledger.
Supplies to an EOU: the Circular 14 procedure
Circular No. 14/14/2017-GST (6 November 2017) sets safeguards for deemed export supplies to EOU, EHTP, STP and BTP units. Circular No. 125/44/2019-GST para 41 requires them to be followed:
- The recipient unit gives prior intimation in “Form-A”, with a running serial number, listing the goods “as pre-approved by the Development Commissioner” and the supplier. It goes to the supplier, the supplier’s jurisdictional GST officer and the unit’s own GST officer.
- The supplier supplies under a tax invoice.
- On receipt, the unit endorses the tax invoice and sends a copy to the same three. “The endorsed tax invoice will be considered as proof of deemed export supplies.”
- The unit keeps digital records of receipt, use and removal in the data elements of “Form-B”, with an audit trail. It gives a monthly copy to its GST officer by the 10th of the month.
The time limit
The claim must be made within two years of the relevant date (section 54(1)). Explanation 2(b) fixes the relevant date as “the date on which the return relating to such deemed exports is furnished”. Circular No. 166/22/2021-GST (17 November 2021) clarifies that this clause applies “irrespective of the fact whether the refund claim is filed by the supplier or by the recipient”. Because the tax is paid by the supplier in its return, “the relevant date … would be the date of filing of return, related to such supplies, by the supplier”. A recipient that waits for its own records therefore runs the risk of being late. The clock started when the supplier filed.
Notification No. 13/2022-Central Tax excludes 1 March 2020 to 28 February 2022 from the two years. A fresh application after a deficiency memo must also fall within it, net of the time excluded by the proviso to rule 90(3).
What to have ready
| Item | Supplier’s claim | Recipient’s claim | Where it comes from |
|---|---|---|---|
| Tax invoices, reported in GSTR-1 as deemed exports | Yes | Supplier’s GSTR-1 must show them | Books, GSTR-1 |
| Advance authorisation, EPCG authorisation or EOU letter of permission | Copy | Own | DGFT, Development Commissioner |
| Officer’s acknowledgement, or EOU-endorsed invoice | Yes | EOU-endorsed invoice | Recipient, its GST officer |
| Recipient’s undertakings: no credit, no refund claim | Yes | Not applicable | Recipient |
| Credit taken on the invoices in GSTR-3B, and ledger balance | Not applicable | Yes | Return, credit ledger |
| Declaration that the supplier has not claimed | Not applicable | Yes | Recipient, with supplier’s confirmation |
| Form-A intimations and Form-B records (EOU) | Copies | Own | Circular 14/14/2017-GST |
| CA certificate under Notification 1/2019, where it applies | Recipient’s | Own | Chartered accountant |
| Rule 89(2)(l) declaration or (m) certificate on incidence | Yes | Yes | Books; chartered or cost accountant |
Filing on the portal
The portal’s manuals provide two grounds, “Supplier of Deemed Exports” and “Recipient of Deemed Exports”. For both, Statement 5B, listing the invoices and any debit and credit notes, is prepared in the offline utility, uploaded and validated. The portal’s FAQs record two differences:
- Supplier’s claim. Statement 5B is validated “with the data already declared by the taxpayer while filing return GSTR-1”. The FAQ describes the claim as available where the supplier “has not collected tax from the recipient” and paid it to the government. Up to ten documents of 5 MB each may be uploaded.
- Recipient’s claim. Statement 5B is validated against the details “declared by the supplier of deemed exports, in their Form GSTR-1”. “Selection of tax period has been discontinued” for this ground, so no nil applications are needed. The amount is debited from the recipient’s credit ledger on filing. Up to fifteen documents may be uploaded.
The application is filed with DSC or EVC by the authorised signatory. The portal generates an ARN. The officer then acknowledges in RFD-02 or issues a deficiency memo in RFD-03 within fifteen days (rule 90). The rest follows rules 92 and 93: notice in RFD-08 before rejection, order in RFD-06, and payment by RFD-05.
Rule 96(10) and deemed export inputs
Until 8 October 2024, rule 96(10) barred an exporter from claiming refund of IGST paid on exports if it had received supplies on which the supplier had availed Notification No. 48/2017-Central Tax. Advance authorisation holders that bought locally under deemed export, and exported on payment of IGST, faced recovery of their IGST refunds. The rule was omitted by Notification No. 20/2024-Central Tax. In Goodluck India (Supreme Court, 6 August 2026) the omission was held to apply to all pending proceedings. The detail is in Refund of IGST Paid on Exports.
Consequences, and what can still be put right
- A double claim. If both supplier and recipient claim, or the recipient takes credit on invoices the supplier has claimed, the excess is recovered as an erroneous refund under section 73, 74 or 74A with interest.
- A missing undertaking or endorsement draws a deficiency memo. A fresh RFD-01 is filed with the document. The time from the first filing to the memo is excluded from the two years.
- A mismatch in Statement 5B is corrected by amending the supplier’s GSTR-1 (Correcting Mistakes in Returns) and refiling.
- A rejection is preceded by RFD-08 and a hearing, and is appealable under section 107. A rejected amount debited from the recipient’s credit ledger is re-credited by PMT-03 under rule 93(2), once the appeal is finally rejected or an undertaking not to appeal is given.
- Delay beyond sixty days from a complete application carries interest at 6 per cent under section 56.
The procedure in order
- Confirm the supply falls in one of the four entries of Notification No. 48/2017-Central Tax, and that the goods are manufactured in India.
- For an EOU, obtain the Form-A intimation before supplying, and the endorsed invoice after.
- Decide who will claim. If the supplier, obtain the recipient’s undertakings and its officer’s acknowledgement or endorsed invoice, and the recipient takes no credit. If the recipient, it takes credit in GSTR-3B first.
- Report the invoices in the supplier’s GSTR-1, and note the date of that return. The two years run from it.
- File RFD-01 under the right ground with Statement 5B, the undertakings and the declaration or certificate on incidence, with DSC or EVC.
- Track RFD-02 or RFD-03, answer any RFD-08 in RFD-09 within fifteen days, and check that the RFD-06 amount is paid by RFD-05.
The next guide covers tax paid under the wrong head: CGST and SGST where IGST was due, or the other way round.