GST · 26 June 2026
What Are Deemed Exports Under GST (Section 147)?
Deemed exports are supplies of goods notified under Section 147 of the CGST Act that are treated as exports for refund purposes even though the goods do not leave India. The goods must be manufactured in India and payment may be received in Indian rupees. Unlike a true export, GST is paid on a deemed export and then refunded, so there is no LUT route and the supply is not zero-rated. Notification 48/2017-Central Tax notifies four categories: supply against an Advance Authorisation, supply of capital goods against an EPCG Authorisation, supply to an Export Oriented Unit (EOU), and supply of gold by a bank or PSU against an Advance Authorisation. The refund of the tax can be claimed by either the supplier or the recipient under Rule 89.
By Mrs. Swapna Patel
Last reviewed
26 June 2026
In this section
Answers
- What Are Deemed Exports Under GST (Section 147)?
- What Is GSTR-1, the GST Return of Outward Supplies?
- What Is GSTR-3B, the Monthly GST Summary Return?
- What Is the Time of Supply Under GST, and When Does Tax Become Due?
- Advance Receipt Under GST: When Do You Issue a Receipt Voucher?
- Credit Note vs Debit Note Under GST: When Do You Issue Each?
- What Is GSTR-2B, and Why Does It Now Decide Your Input Tax Credit?
- What Is the Value of Supply Under Section 15 of the CGST Act?
- What Are the GST Rate Slabs in India After the GST 2.0 Reform?
- Exempt vs Nil-Rated vs Zero-Rated Supply: What Is the Difference?
If the goods never leave India, the supply cannot possibly count as an export.
Under Section 147 of the CGST Act, the government can notify certain domestic supplies as deemed exports, where the goods stay in India but the GST paid is refundable (Notification 48/2017-Central Tax).
What are deemed exports under GST?
Short answer
Deemed exports are domestic supplies of goods notified under Section 147 of the CGST Act that are treated as exports for refund, even though the goods never leave India.
Some supplies feed the export economy without crossing the border. A factory selling to an exporter holding an Advance Authorisation, for example, is supplying inputs that will eventually be exported. Section 147 lets the government label such supplies deemed exports, so the GST paid on them can be recovered. The goods must be made in India, and payment can be in rupees, which is the key difference from a normal export.
Which supplies are notified as deemed exports?
Short answer
Four categories, listed in Notification 48/2017-Central Tax, all tied to advance-licence or export-unit schemes.
- Supply of goods against an Advance Authorisation issued by the DGFT.
- Supply of capital goods against an EPCG (Export Promotion Capital Goods) Authorisation.
- Supply of goods to an Export Oriented Unit (EOU), Software/Hardware Technology Park, or Bio-Technology Park.
- Supply of gold by a bank or public sector undertaking against an Advance Authorisation.
How do deemed exports differ from zero-rated exports?
Short answer
A real export is zero-rated under Section 16 IGST and ships without GST; a deemed export is taxed first, then refunded, and the goods stay in India.
| Feature | Zero-rated export | Deemed export |
|---|---|---|
| Do goods leave India? | Yes | No |
| Is GST charged? | No (under LUT) or paid then refunded | Yes, always paid first |
| LUT / bond route available? | Yes | No |
| Who can claim the refund? | The exporter | The supplier or the recipient |
| Payment currency | Foreign exchange (services) or as prescribed | May be in Indian rupees |
Who claims the refund on a deemed export?
Short answer
Either the supplier or the recipient, under Rule 89 of the CGST Rules, but only one of them, supported by the right declarations.
- If the recipient claims it, the supplier gives an undertaking not to claim; if the supplier claims, the recipient does not take input tax credit on it.
- This matters because the tax is real money paid upfront, so a missed refund window is a direct cash loss.
- Each deemed-export invoice should be endorsed "Supply meant for export/supply on payment of tax" so it evidences the claim.
References & related
Primary sources
- Section 147, Central Goods and Services Tax Act 2017 — CBICGovernment may notify certain supplies of goods as deemed exports.
- Notification 48/2017-Central Tax dated 18 October 2017 — CBICNotifies the four categories of supplies that qualify as deemed exports.
- Rule 89, Central Goods and Services Tax Rules 2017 — CBICApplication for refund; the supplier or recipient may claim the deemed-export refund.
- Section 16, Integrated Goods and Services Tax Act 2017 — CBICZero-rated supply, for contrast with deemed exports.
Last reviewed: 26 June 2026