Clarification on Deemed Export Status for EOU-to-EOU Supplies under GST

Dear Sir/Madam,

I am writing to seek clarification on the applicability of Notification No. 48/2017-Central Tax, dated 18.10.2017, and Circular No. 14/14/2017-GST, dated 06.11.2017, specifically concerning the treatment of a supply of goods from one Export Oriented Unit (EOU) to another EOU.

Notification No. 48/2017-Central Tax notifies "supply of goods by a registered person to an EOU" as a deemed export. Given that an EOU is also a "registered person" under the GST Act, a literal interpretation suggests that a supply from one EOU (as a supplier) to another EOU (as a recipient) should qualify as a deemed export.

The deemed export provision under Section 147 and Notification No. 48/2017-Central Tax was created for a very specific purpose: to provide a level playing field for domestic suppliers and the same is stated in Chapter 7, of the Foreign Trade Policy 2023: "

However, the procedural framework outlined in Circular No. 14/14/2017-GST, particularly the requirement for prior intimation in Form A and the endorsement of the invoice, seems to be primarily designed for DTA-to-EOU supplies, creating an ambiguity. This ambiguity leads to practical difficulties in determining the eligibility for a refund of GST paid on such supplies, as the refund mechanism under the deemed export provisions may not be applicable for EOU-to-EOU transactions.

I kindly request your official clarification on the following point:

Does a supply of goods by a registered EOU to another registered EOU qualify as a "deemed export" under Notification No. 48/2017-Central Tax, and whether refund of gst can be claimed?

While a strict literal reading of Notification No. 48/2017-Central Tax appears to qualify EOU-to-EOU supplies as "deemed exports," the absence of procedure in the circular for EOU-to-EOU transactions makes the facilitation of GST refunds on such transactions unsupported by current procedural law and practice.
Notification No. 48/2017-Central Tax defines "deemed exports" as supplies from a registered person (typically a DTA unit) to an EOU. The intent is to provide a refund mechanism to the DTA supplier.
The deemed export provision is specifically designed for DTA-to-EOU supplies. The transfer of goods between two EOUs, while both are "registered persons," falls outside the scope of this provision as per the intent and framework of both GST law and the FTP. The procedural requirements mentioned in Circular No. 14/14/2017-GST, such as prior intimation in Form A, are also specifically for DTA-to-EOU supplies and do not apply to EOU-to-EOU transfers.
Until a specific government circular or clarification is issued to extend procedural compliance and refund eligibility to EOU-to-EOU supplies, such transactions will continue to face ambiguity and practical difficulties in claiming refunds under the deemed export framework.
It is advisable to seek advance ruling or clarification from the jurisdictional GST Commissioner to secure refund eligibility, pending formal procedural guidance.