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Deemed exports are transactions where the goods never leave India, yet the supply qualifies for export benefits. The Foreign Trade Policy grants them because the domestic manufacturer competing for that order is up against an importer who pays no duty.
This page sets out all seven qualifying categories, the three benefits available, which benefit attaches to which category, the conditions that disqualify most failed claims, how to file ANF 7A after the December 2025 procedural changes, where a BRC certificate fits in the file, and how the GST position differs from the Foreign Trade Policy position.
Under Para 7.01 of the Foreign Trade Policy 2023, Chapter 7, deemed exports are transactions in which the goods supplied do not leave the country, and payment is received either in Indian rupees or in free foreign exchange. The supply must fall within one of the categories in FTP Para 7.02, and the goods must be manufactured in India.
That last condition is absolute. Imported goods traded on do not become deemed exports, however the supply is invoiced. The scheme exists to give domestic manufacturers a level playing field and to support Make in India, which is the stated objective in FTP Para 7.00.
This catches people constantly, and it is worth understanding before you build any claim.
FTP Para 7.01(ii) states plainly that deemed exports for GST purposes include only the supplies notified under Section 147 of the CGST or SGST Act on the recommendations of the GST Council. The GST benefits, and the conditions attached to them, are whatever the GST Council and the relevant rules and notifications specify.
So a supply can be deemed exports under the Foreign Trade Policy and attract FTP benefits, while not being deemed exports for GST. The two lists overlap. They are not identical. Treating an FTP entitlement as a GST entitlement is how a claim becomes a demand notice.
| Term | Meaning |
| ARO | Advance Release Order, allowing an Authorisation holder to source domestically |
| Invalidation letter | Endorsement invalidating an Authorisation for direct import, enabling domestic sourcing. Issued in terms of HBP Para 4.30 |
| TED | Terminal Excise Duty, refundable in limited deemed exports cases |
| Deemed export drawback | Refund of duty on inputs used in the supplied goods |
| ANF 7A | The application form for a deemed exports benefit claim, substituted with effect from 10 December 2025 |
| PAC | Project Authority Certificate in Appendix 7C, required for project supplies |
| ICB | International Competitive Bidding, a condition on several categories |
| RA | Regional Authority of DGFT, which sanctions the claim |
| BRC certificate | Bank Realisation Certificate, now self-certified electronically as an eBRC in the Appendix 2U format |
FTP Para 7.02 splits the categories by who supplies. Part A, categories (a) to (c), are supplies by a manufacturer. Part B, categories (d) to (g), are supplies by main or sub-contractors. The Handbook works off that split, so quoting a category without its part is how the wrong applicant ends up filing.
| Category | Supply |
| (a) | Goods against Advance Authorisation, Advance Authorisation for annual requirement, or DFIA |
| (b) | Goods to EOU, STP, EHTP or BTP |
| (c) | Capital goods against EPCG Authorisation |
| (d) | Goods to projects financed by multilateral or bilateral agencies or funds notified by the Department of Economic Affairs, where the legal agreement provides for tender evaluation without customs duty, or turnkey supply and installation evaluated on Delivered Duty Paid prices. Supplies must be under International Competitive Bidding. The agency list is Appendix 7A |
| (e) | Goods to any project permitted zero basic customs duty import under Customs Notification No. 50/2017-Customs, including mega power projects at Sl. No. 598, subject to the conditions there. Benefits apply only where the supply is under ICB, though for mega power projects ICB is not mandatory if the power has been tied up through tariff based competitive bidding, or the project was awarded that way |
| (f) | Goods to the United Nations or an international organisation for official use, or to projects they finance, under Customs Notification No. 84/97-Customs. The agency list is Appendix 7B |
| (g) | Goods to nuclear power projects at Sl. No. 602 of Customs Notification No. 50/2017-Customs, where the project capacity is 440 MW or more, certified by an officer not below Joint Secretary in the Department of Atomic Energy, and tendered through National or International Competitive Bidding |
FTP Para 7.03 allows any or all of three benefits, subject to the conditions in the Handbook and ANF 7A:
FTP Para 7.04 maps them to categories. This table decides what you can actually claim.
| Category | Advance Authorisation | Duty drawback | Terminal excise duty |
| (a) | Yes, for intermediate supplies against an invalidation letter | Yes, against ARO | Yes |
| (b) | Yes | Yes | Yes |
| (c) | Yes | Yes | Not applicable |
| (d) | Yes | Yes | Not applicable |
| (e) | Yes | Yes | Not applicable |
| (f) | Yes | Yes | Not applicable |
| (g) | Yes | Yes | Not applicable |
The pattern to notice: terminal excise duty refund survives only for categories (a) and (b). Every project supply category gets Advance Authorisation and drawback, and nothing on TED.
Most rejections happen because of supply-route or documentation conditions, not basic eligibility.
FTP Para 7.08 restricts three commodities, and this section alone resolves a large share of disputes.
If your commodity is one of these three, check the restriction before you check the category.
The procedure changed in December 2025, when DGFT Public Notice No. 35/2025-26 dated 10 December 2025 substituted parts of Chapter 7 of the Handbook and replaced ANF 7A. Anything written before that date describes a filing route that no longer exists.
Identify which of the seven deemed export categories your supply falls under, and whether it sits in Part A or Part B of FTP Para 7.02. Then check which benefits apply using the FTP Para 7.04 matrix before filing.
Payment must be received in full through normal banking channels, evidenced by the e-BRC, under HBP Para 7.03(f). HBP Para 7.03(e) allows the claim to be filed only after payment is received in full, to the extent of supplies made, for categories 7.02 A (a) to (c).
For project supplies in categories 7.02 B (d) to (g), HBP Para 7.05(b) applies instead: the claim may be filed on proof of supplies effected or of payment received, so a part payment does not block filing once the supplies are complete, with the benefit limited to the amount actually received. A Project Authority payment certificate in Appendix 7D is required in addition.
The revised ANF 7A lists nine documents. Depending on the claim, gather:
Where the supply is High Speed Diesel from a public sector oil company depot, the Annexure IV certificate of duty paid is added to the file.
HBP Para 7.01, as substituted by Public Notice 35/2025-26, now fixes jurisdiction precisely:
Filing is online. HBP Para 7.03(a) requires the application to be filed online by the supplier or the recipient holding an IEC, and HBP Para 7.03(c) requires the documents to be uploaded at the time of filing, with no physical copy submitted to the Regional Authority.
Because the claim now runs entirely on the DGFT portal, two things have to be in place before you start: an active IEC and a valid IEC-linked Class 3 digital signature. If the IEC has lapsed, deal with IEC renewal first, and if the token has expired or was never mapped, get the DGFT digital signature sorted before the deadline rather than after it.
New HBP Para 7.05(c) adds a rule that catches a lot of files: one application, one category. A single ANF 7A covering supplies in more than one FTP Para 7.02 category is not permissible, so mixed files have to be split.
Keep track of the final approval letter, because the interest period under FTP Para 7.09 runs from the date the Regional Authority issues that letter, not from the date you submitted the claim.
The 12-month filing deadline in HBP Para 7.05 is one of the most important points for deemed exports claims.
For supplies against Authorisations and to EOU, STP, EHTP and BTP units, file within 12 months from realisation of 100% payment. If payment was received in advance and the supply followed, the period runs from the last date of such supplies. Claims are filed invalidation letter-wise or ARO-wise for each Authorisation.
For project supplies, HBP Para 7.05(b) allows the claim to be filed on the basis of proof of supplies effected or of payment received, within 12 months from either:
at the applicant’s option.
A late claim is not automatically rejected. HBP Para 7.07 says so directly: where the claim is filed after the prescribed period, the late cut under HBP Para 11.02 and the supplementary claim provision under HBP Para 11.03 apply. ANF 7A carries a column for the applicable late cut rate, and the rate follows how far past the deadline the application is filed.
Three provisions matter here: interest payable to you, audit of approved claims, and recovery of excess or ineligible payments.
Under FTP Para 7.09, simple interest at 6% per annum is payable if the claim is not settled within 30 days from the date the Regional Authority issues the final approval letter.
Under HBP Para 7.10, the Regional Authority should calculate and add this interest itself, and the bank mandate should cover both principal and interest. If it does not, there is a hard deadline: file ANF 7B within 30 days from the date you receive the principal amount. No interest is payable after that.
Approved claims can still be audited. Under FTP Para 7.10(a), the computer system at DGFT headquarters selects, on a random basis, 10% of cases every month for each Regional Authority. Those cases go to an internal audit team headed by a Joint DGFT in the office of the respective Zonal Additional DGFT. Supporting documents and the basis of the claim therefore need to survive well past approval and payment.
Where an erroneous or ineligible payment has been made, FTP Para 7.10(b) allows recovery of the amount with interest at 15% per annum.
The asymmetry is deliberate: DGFT pays 6% on delayed settlement and recovers at 15%. Under FTP Para 7.11, claims involving mis-declaration or misrepresentation also attract penal action under the Foreign Trade (Development and Regulation) Act.
The practical takeaway: track the 30-day interest deadline, retain the complete claim record for audit, and make sure every statement and supporting document is accurate before filing.
A BRC certificate (Bank Realisation Certificate) is evidence that payment has been realised. For deemed exports it is not merely supporting paperwork. HBP Para 7.03(f) ties eligibility to payment received through the normal banking channel as per the e-BRC, and requires the supply documents to be negotiated through a bank. For supplies in categories (d) to (g), a Project Authority payment certificate in Appendix 7D is submitted as well.
That makes the payment trail decisive. If payment is settled outside the banking channel, the claim may be inadmissible however complete the rest of the file is.
Under DGFT’s eBRC self-certification system, banks transmit Inward Remittance Messages (IRMs) directly to DGFT, and the exporter self-certifies the eBRC against them. The process is broadly:
DGFT Public Notice No. 42/2025-26 dated 9 January 2026 amended Appendix 2U, the prescribed eBRC format, with effect from 13 January 2026. The eBRC now carries the GSTIN, the GST invoice number and the GST invoice date, along with a QR code for validation on the DGFT website. Because ANF 7A asks for the e-BRC “with details as per Appendix 2U”, a claim built on an older format certificate is worth re-checking before it goes in.
1. Check the IRM before generating the eBRC. If the inward remittance does not appear in the DGFT repository, you cannot generate the corresponding eBRC. Go to your AD bank rather than retrying on the portal.
2. Verify the purpose code. The purpose code identifies the nature of the transaction. An incorrect code at the banking stage creates problems when the payment is later mapped or supported for the claim.
3. Check service-export details where applicable. For exports of services, the Mode of Export of Services field is mandatory, and a gap there shows up as a deficiency during processing.
A rupee payment does not take the supply outside the banking-channel rule. HBP Para 7.03(f) draws no distinction by currency: the claim is filed against payment received through the normal banking channel, as per e-BRC, whether the deemed export supply was paid for in Indian rupees or in free foreign exchange. The revised ANF 7A checklist says the same, asking for proof of payment through the e-BRC or Bank Realisation Certificate with Appendix 2U details, or the Appendix 7D project authority payment certificate, without a currency carve-out.
Rupee settlements are not outside the eBRC system either. DGFT’s own guidance on eBRC self-certification contemplates INR remittances being reported by the beneficiary bank on the exporter’s declaration, so an IRM and an eBRC can exist for a rupee payment.
The practical rule: route the settlement through a bank, get the IRM reported, self-certify the eBRC, and add the Appendix 7D payment certificate where the category calls for one. Assuming a rupee payment removes the requirement is the fastest way to a deficient file.
The Foreign Trade Policy decides your FTP benefits. It does not decide your GST position, and the two have to be taken separately.
If your question is about IGST paid on physical exports, shipping bill scroll status or SB error codes, that is a different mechanism entirely. See our guide to IGST refund status.
Buried in the ANF 7A undertaking are two conditions that have nothing to do with the supply itself, and either will sink a claim.
You must declare that no export proceeds are outstanding beyond the period prescribed by the RBI, or beyond any extended period for which AD bank or RBI permission has been obtained. An unrelated overdue realisation elsewhere in the business is enough to make this declaration false.
You must also declare that no proprietor, partner, director, karta or trustee has come under the adverse notice of DGFT or appears in the RBI caution list, and, in a second declaration, that none of them holds the same position in another firm that has. Check both before you sign.
A separate declaration in the same undertaking certifies that the person signing is authorised to verify and sign, as per Para 11.06 of the FTP, which is the paragraph that defines who the applicant is. Signature and contents are two different exposures, and both carry penal consequences under declaration 1 of the form.
| Problem | Why it happens | What to do |
| Claim refused although the category fits | The goods were imported or traded, not manufactured in India | FTP Para 7.01(i) makes domestic manufacture part of the definition. Check it before the category |
| Claim rejected on third party supply | Goods routed through an intermediary rather than supplied directly | Restructure so the supply is direct, or use the sub-contractor route with the naming and payment conditions met |
| Sub-contractor claim refused | The sub-contractor was not named in the PAC or contract before supply | HBP Para 7.03(g) requires the endorsement in advance. Fix it at contract stage, not at claim stage |
| TED refund refused on a project supply | Only categories (a) and (b) carry TED | Check the FTP Para 7.04 matrix before filing |
| Drawback refused | CENVAT credit availed on excisable inputs, blocking the All Industry Rate route | Move to Brand Rate with proof of actual basic customs duty payment |
| Recipient will not give the non-availment certificate | Nobody asked for it at supply stage | Build the Annexure I certificate into the purchase order terms |
| Application returned for covering two categories | New HBP Para 7.05(c) allows one category per application | Split into separate applications |
| Application filed with the wrong authority | EOU supplies follow a separate route since December 2025 | DTA supplier to the Jurisdictional RA under Appendix 1A, recipient EOU to the Jurisdictional Development Commissioner of SEZ under Appendix 6J |
| Cement or fuel claim refused | FTP Para 7.08 restricts both to named categories | Check the commodity restriction before the category |
| GST treatment assumed from FTP eligibility | The GST list is only what is notified under Section 147 | Take the GST position separately against Notification 48/2017-Central Tax |
| No eBRC available | The bank has not reported the IRM | Ask the bank to report it, then self-certify on the DGFT portal |
| Rupee payment filed without an eBRC | Assumption that INR settlements sit outside the eBRC system | HBP Para 7.03(f) has no currency carve-out. Get the IRM reported and self-certify |
| Claim filed more than 12 months after payment realisation | The HBP Para 7.05 window closed | Not necessarily dead. Late cut under HBP Para 11.02 and supplementary claim under HBP Para 11.03 may still apply |
| Payment settled outside banking channels | HBP Para 7.03(f) requires payment through normal banking channel as per e-BRC | No admissible claim. Route the settlement through a bank |
| Interest not paid on a delayed refund | The Regional Authority did not add it | File ANF 7B within 30 days of receiving the principal. Nothing is payable after that |
| Part payment assumed to block a project claim | HBP Para 7.05(b) permits filing on part payment for categories (d) to (g) | File, with benefit limited to the payment received, once 100 percent of supplies are made |
| Drawback claim rejected with all certificates in place | Annexure II, the supplier’s declaration, was not filed | Add it. It is required for drawback and is the annexure most often missed |
| Invoices not accepted for non-excisable supplies | GST e-invoices and e-way bills not provided | Supply the system generated e-invoice with the matching e-way bill, or Form A with a recipient endorsed tax invoice for EOU, STP, EHTP and BTP supplies |
| Claim sunk by an unrelated overdue realisation | The ANF 7A undertaking requires no export proceeds outstanding beyond the RBI period | Clear or regularise the outstanding before filing |
Deemed export claims usually fail on missing certificates, wrong category, weak evidence, or an incomplete file. Our Deemed Exports Advisory fixes that: eligibility assessment, condition checks, ANF 7A documentation, filing with the correct authority under December 2025 jurisdiction rules, brand rate fixation, deadline and claim tracking, Appendix 2U eBRC reconciliation, and an audit-ready file.
You get: a clear eligibility position, a properly filed claim, and complete approval documentation.
Send your supply contract, Authorisation, and payment details. We’ll tell you what you can claim.
Book a Free Consultation → | Call 09167 379073
Under FTP Para 7.01 of the Foreign Trade Policy 2023, deemed exports are transactions where the goods supplied do not leave India and payment is received in Indian rupees or free foreign exchange. The supply must fall within one of the categories in FTP Para 7.02 and the goods must be manufactured in India.
Seven, split into two parts. Part A covers supplies by a manufacturer: against Advance Authorisation or DFIA, to EOU, STP, EHTP or BTP, and capital goods against EPCG. Part B covers supplies by main or sub-contractors: to multilateral or bilateral funded projects, to zero duty projects including mega power projects, to the United Nations or international organisations, and to nuclear power projects of 440 MW or more.
Three. Advance Authorisation or DFIA, deemed export drawback, and refund of terminal excise duty on Schedule 4 goods where eligible and unexempted. Which ones apply depends on the category, and terminal excise duty survives only for supplies against Advance Authorisation or DFIA and supplies to EOU, STP, EHTP and BTP.
No. FTP Para 7.01(ii) states that deemed exports for GST purposes include only supplies notified under Section 147 of the CGST or SGST Act. That notification, 48/2017-Central Tax, lists four entries, so FTP categories (d) to (g) have no GST counterpart at all.
No. FTP Para 7.07(i) requires supplies to be made directly to the entities listed in FTP Para 7.02. Sub-contractors have a permitted route, but HBP Para 7.03(g) requires the sub-contractor to be named in the Project Authority Certificate or contract before the goods are supplied.
With the Jurisdictional Regional Authority as per Appendix 1A for every category except supplies to an EOU. For EOU supplies, the DTA supplier claims from the Jurisdictional Regional Authority and the recipient EOU files with the Jurisdictional Development Commissioner of the SEZ as per Appendix 6J, provided the supplier has not already claimed. This is HBP Para 7.01 as substituted by Public Notice 35/2025-26.
For supplies against Authorisations and to EOU, STP, EHTP and BTP, file within 12 months from realisation of 100 percent payment, or from the last date of supply where payment was in advance. For project supplies, file within 12 months from receipt of supplies by the project authority or from receipt of payment, at your option, and part payments do not prevent filing. Since Public Notice No. 35/2025-26 dated 10 December 2025, filing is online, no physical copy goes to the Regional Authority, and each application covers a single category of supply.
A time barred claim is not automatically lost. HBP Para 7.07 applies the late cut in HBP Para 11.02 and the supplementary claim provision in HBP Para 11.03.
Yes. Simple interest at 6 percent per annum where the claim is not settled within 30 days from the final approval letter issued by the Regional Authority. The Regional Authority should add it automatically. If it does not, file ANF 7B within 30 days of receiving the principal amount, because no interest is paid after that.
The Regional Authority recovers the payment with interest at 15 percent per annum under FTP Para 7.10(b). The computer system at DGFT headquarters selects 10 percent of cases for internal audit each month for every Regional Authority, and mis-declaration attracts penal action under the FT (D&R) Act.
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