# What Are Deemed Exports Under GST (Section 147)?

**Category:** GST | **Published:** 2026-06-26 | **Last reviewed:** 2026-06-26 | **Author:** Mrs. Swapna Patel

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.

> **Myth:** If the goods never leave India, the supply cannot possibly count as an export.
>
> **Fact:** Under [Section 147 of the CGST Act](https://www.cbic.gov.in/htdocs-cbec/gst/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](https://cbic-gst.gov.in/central-tax-notfns-2017.html)).

## What are deemed exports under GST?

> **Short answer:** Deemed exports are domestic supplies of goods notified under [Section 147 of the CGST Act](https://www.cbic.gov.in/htdocs-cbec/gst/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](https://cbic-gst.gov.in/central-tax-notfns-2017.html), 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](https://www.cbic.gov.in/htdocs-cbec/gst/igst-act) 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](https://www.cbic.gov.in/htdocs-cbec/gst/cgst-rules-as-amended), 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.

**[Generate an endorsed GST tax invoice](https://hrareceipt.in/pakka-bill)**

## Primary sources

- [Section 147, Central Goods and Services Tax Act 2017 — CBIC](https://www.cbic.gov.in/htdocs-cbec/gst/cgst-act) — Government may notify certain supplies of goods as deemed exports.
- [Notification 48/2017-Central Tax dated 18 October 2017 — CBIC](https://cbic-gst.gov.in/central-tax-notfns-2017.html) — Notifies the four categories of supplies that qualify as deemed exports.
- [Rule 89, Central Goods and Services Tax Rules 2017 — CBIC](https://www.cbic.gov.in/htdocs-cbec/gst/cgst-rules-as-amended) — Application for refund; the supplier or recipient may claim the deemed-export refund.
- [Section 16, Integrated Goods and Services Tax Act 2017 — CBIC](https://www.cbic.gov.in/htdocs-cbec/gst/igst-act) — Zero-rated supply, for contrast with deemed exports.

## Related

- [What is an LUT — the zero-rated route deemed exports cannot use](https://hrareceipt.in/answers/what-is-lut-letter-of-undertaking-gst-export)
- [What is input tax credit (ITC) — the credit behind a refund claim](https://hrareceipt.in/answers/what-is-input-tax-credit-itc)
- [What is a pakka bill — the GST invoice that counts as valid](https://hrareceipt.in/answers/what-is-a-pakka-bill)

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