Committee headed by DGFT Anup K Pujari set up to examine Deemed Export Scheme

The deemed export scheme available to suppliers of products to specified projects is under review by the government in the backdrop of the commerce ministry setting up a committee. The committee headed by Director General for Foreign Trade Anup K Pujari set up on 2 May 2011 will review the very existence of the deemed export scheme whose scope has considerably widened over the years. The committee also includes representatives from the finance ministry, Reserve Bank of India, Planning Commission and the revenue department.

Deemed exports refer to transactions in which goods supplied do not leave the country, and payment for such supplies is received either in Indian rupees or foreign exchange. Supply of goods to export-oriented units, software technology parks or to projects financed by multilateral agencies and to power projects and refineries are treated as deemed exports at present. The benefits include those available under export promotion schemes.

 The six-member panel headed by Director General for Foreign Trade Anup K Pujari was asked to revisit deemed exports issue and examine whether it properly reflected government priorities.  In addition, the committee was asked to rework the scheme in a way that it is not open to multiple interpretations. The review of the deemed export scheme comes when the government is trying to check leakages so that a scheme is not open to misuse.

The finance ministry has been pushing for several years now for lowering the concessions and tightening the provisions to check misuse. Various export promotion schemes are estimated to have resulted in the government foregoing revenue of the order of Rs 54,000 crore, though the share of the deemed exports scheme was low.