Section 147 empowers the Government to notify certain supplies of goods as "deemed exports." Although these supplies do not involve the physical export of goods outside India, they are treated similarly to exports for specific GST benefits. The purpose of this provision is to promote particular sectors and transactions that contribute to economic growth and export promotion.

Under normal circumstances, exports involve goods leaving India and are generally treated as zero-rated supplies under GST. However, certain transactions are considered important enough to receive similar benefits even though the goods remain within the country. The Government may notify such supplies as deemed exports through official notifications.

Typically, deemed exports involve supplies where goods are manufactured in India and payment is received either in Indian Rupees or convertible foreign exchange. The benefit of deemed export status generally allows either the supplier or recipient to claim a refund of GST paid on such supplies, subject to prescribed conditions and procedures.

The objective of this section is to ensure that taxes do not become a cost in specific strategic transactions. It helps improve competitiveness, supports domestic manufacturing, and encourages sectors that contribute to exports and industrial development.

The Government has notified various categories of supplies as deemed exports from time to time, including certain supplies made to Export Oriented Units (EOUs) and projects specified under government schemes.

By granting export-related benefits without requiring physical export, Section 147 supports economic activity while ensuring tax neutrality.

Example:
A manufacturer supplies goods to an Export Oriented Unit (EOU). Such supply may qualify as a deemed export and become eligible for GST refund benefits.

Key Point:
Certain domestic supplies are granted export-related GST benefits.

In One Line:
Specified domestic supplies can be treated as exports even though goods do not leave India.