Section 147 of CGST Act: Deemed Exports
Section 147 of the Central Goods and Services Tax Act, 2017 empowers the Central Government, on the recommendations of the GST Council, to notify specified supplies of goods as "deemed exports" when the goods are manufactured in India, do not leave India, and payment is received in Indian rupees or convertible foreign exchange.
Updated for legal reference: 15 September 2026.
- Deemed exports are notified supplies of goods; they are not the same as physical exports outside India.
- The category is created by a Central Government notification issued under Section 147.
- Notification No. 48/2017-Central Tax dated 18 October 2017 notifies specified supplies as deemed exports.
- Refund of tax paid on deemed export supplies is governed principally by Section 54 and Rule 89 of the CGST Rules, 2017.
Text and meaning of Section 147
Section 147 - Deemed exports.
In substance, the provision authorises the Government, on the recommendations of the GST Council, to notify supplies of goods as deemed exports where the goods supplied do not leave India, payment is received in Indian rupees or convertible foreign exchange, and the goods are manufactured in India.
The expression "deemed export" therefore describes a statutory GST treatment for specified domestic supplies. Merely supplying goods for an export-oriented purpose does not by itself make the supply a deemed export. The supply must fall within a category notified by the Government under Section 147 and satisfy the applicable conditions.
Supplies notified as deemed exports
Notification No. 48/2017-Central Tax dated 18 October 2017 is the principal notification under Section 147. Subject to the notification and the applicable Foreign Trade Policy framework, it covers specified supplies including the following:
- Supply of goods by a registered person against an Advance Authorisation.
- Supply of capital goods by a registered person against an Export Promotion Capital Goods Authorisation.
- Supply of goods by a registered person to an Export Oriented Unit.
- Supply of gold by a bank or specified Public Sector Undertaking against an Advance Authorisation.
The meaning of "Advance Authorisation" for this notification was amended by Notification No. 01/2019-Central Tax dated 15 January 2019. Eligibility should therefore be checked against the current notification, applicable authorisation and conditions.
Deemed exports are different from zero-rated exports
| Point | Deemed export under Section 147 | Export / zero-rated supply |
|---|---|---|
| Movement of goods | Goods do not leave India. | Export of goods ordinarily involves taking goods out of India. |
| Nature | Only notified supplies of goods qualify. | Zero-rating is governed by the IGST Act for exports and supplies to SEZ in the manner provided by law. |
| Tax / refund | Tax is paid and refund may be claimed by the eligible supplier or recipient under the prescribed procedure. | Separate statutory provisions and refund mechanisms apply to zero-rated supplies. |
Refund of tax paid on deemed export supplies
The third proviso to Rule 89(1) of the CGST Rules permits a refund application in respect of deemed export supplies by the recipient, or by the supplier where the recipient does not avail the relevant input tax credit and furnishes the prescribed undertaking. The supporting evidence and declarations are important because the GST framework prevents duplicate refund or credit benefit on the same supply.
For deemed-export refund claims, Statement 5B is used for invoice details. Notification No. 49/2017-Central Tax dated 18 October 2017 prescribes evidence for a supplier claiming refund, while the refund rules and prescribed forms contain the relevant declarations. CBIC has also issued refund clarifications, including Circular No. 147/03/2021-GST dated 12 March 2021, which clarified the treatment of input tax credit where the recipient claims refund.
Practical checks before claiming refund
- Confirm that the supply falls within Notification No. 48/2017-Central Tax, as amended.
- Verify the applicable authorisation, recipient status and documentary conditions before supply.
- Ensure that the supplier and recipient do not both claim refund for the same invoices.
- Where the supplier claims refund, verify the recipient's non-availment of input tax credit and prescribed undertaking requirements.
- Reconcile invoice particulars, tax paid, returns and Statement 5B before filing the refund application.
Important related provisions
Section 146 - Common Portal precedes Section 147, while Section 148 - Special procedure for certain processes follows it. Refund claims should also be read with the relevant provisions of the CGST Act, 2017 and the CGST Rules, 2017.