Indian Fiscal Budget 1997-98: EXIM POLICY 1997-2002



10.1"Deemed Exports" refers to those transactions in which the goods supplied do not leave the country and the payment for such goods are made in India, by the recepient of the goods.

Categories of supply

10.2The following categories of supply of goods by the main/sub- contractors shall be regarded as "Deemed Exports" under this Policy, provided the goods are manufactured in India:

(a)Supply of goods against duty free licences issued under the Duty Exemption Scheme;

(b)Supply of goods to Export Oriented Units (EOUs) or units located in Export Processing Zones (EPZs) or Software Technology Parks (STPs) or to Electronic Hardware Technology Parks (EHTPs);

(c)Supply of capital goods to holders of licences under the Export Promotion Capital Goods (EPCG) scheme subject to the condition that such supplies will be eligible for benefits as stated in paragraph 6.9 of the Policy;

(d)Supply of goods to projects financed by multilateral or bilateral agencies/ Funds as notified by the Department of Economic Affairs, Ministry of Finance under international competitive bidding or under limited tender system in accordance with the procedures of those agencies/ Funds, where the legal agreements provide for tender evaluation without including the customs duty;

(e)Supply of capital goods and spares to the extent of 10% of the FOR value to fertiliser plants if the supply is made under the procedure of international competitive bidding;

(f)Supply of goods to any project or purpose in respect of which the Ministry of Finance, by a notification, permits the import of such goods at zero customs duty coupled with the extension of benefits under this Chapter to domestic supplies; and

(g)Supply of goods to the Power, Oil and Gas sectors in respect of which a notification duly approved by Ministry of Finance, extends the benefit under this Chapter to domestic supplies.

Benefits for deemed exports

10.3Deemed exports shall be eligible for the following benefits in respect of manufacture and supply of goods qualifying as deemed exports:

(a)Special Imprest Licence/Advance Intermediate Licence;

(b)Deemed Exports Drawback Scheme;

(c)Refund of terminal excise duty; and

(d)Special Import Licence at the rate of 6% of the FOR value (excluding all taxes and levies).

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