QUESTION

Opted for Advance Authorization Scheme as well as EPCG Scheme under EXIM policy. So far as export obligation concerned can we claim export obligation simaltaneously on the export of consignment. For the sake of clarity in other word on clearance of one consignement under export or SEZ at a time can we claim export obligation in both the scheme under Advance Authorization and EPCG Scheme. Pl advise.
If the script is invalidated for local procurement and shipping billl contains under LUT though required tax paid under GST regime. Are we eligible for refund claim.
Further Clarification
A-.1 Advance Authorization.
A - 2 It is not related to ITC. But it is related to procurement with payment of tax against invalidated Advance Authorization as per exim policy. of course for export products. Who will be eligible i.e Advance Authorization Holder or supplier of goods.

ANSWER

Facts of the case: You supply material to SEZ against LUT. You have procured material against Advance Authorization from DTA on payment of tax and also have imported Capital Goods under EPCG Scheme. Your questions are:
1. Whether the supply to SEZ will be counted in achieving Export Obligation under EPCG and Advance Authorization both?
2. Who will claim refund of the tax paid by the DTA unit?

Reply 1. : For exporting any products various resources are used. These are: Capital Goods, Inputs and Input Services.
The basic policy of the Government is to Export Goods and services and not to Export tax and duties.

The Advance Authorization is a scrip issued to remove burden of tax on material. On the other hand, EPCG is a scrip issued to remove the burden of tax on Capital goods. So both the Schemes are designed for different factors. Accordingly, they are parallel to each other.

The turnover of Export may be counted for both the scrips. For this you have to mention scrips number of Advance Authorization as well as EPCG on the Export documents.

Reply 2. : The Central Government on the recommendation of the Council may notify certain supplies as Deemed Export u/s 147 of the CGST Act.
Notification No. 48/2017 Central Tax dt. 18.10.2017 notifies supply against Advance Authorization as Deemed Export.
Further Notification No. 49/2017 Central Tax dt. 18.10.2017 notifies the evidences to be used for refund against Deemed Export.

Rule 89 related to Application for refund of tax, interest, penalty, fees or any other amount contains provision of Refunds. Relevant portion of the same is reproduced below:
CGST RULE 89

Provided also that in respect of supplies regarded as deemed exports, the application may be filed by, -

(a) the recipient of deemed export supplies; or

(b) the supplier of deemed export supplies in cases where the recipient does not avail of input tax credit on such supplies and furnishes an undertaking to the effect that the supplier may claim the refund

According to above para the refund of tax paid by the DTA against Deemed Export may be claimed by either of supplier or recipient.

NOTE 1.: Although Notification No. 49/2017 Central Tax is issued for the evidentiary documents to be used by supplier. It does not mean that it overrules CGST Rule 89.

NOTE 2.: We take this opportunity to inform you that it is useless to follow the procedure of invalidation of Advance Authorization against DTA procurement because you can take ITC of the DTA procurement and export goods on payment of tax and claim refund of it. By doing this you can avoid hassles of issue and redemption of Advance Authorization.

Further Question received on mail
But here would like to clarify that, the query was centric to export only but since the policy includes SEZ also therefore SEZ was included in the poser. But reply appears to be centric on SEZ. Therefore, if there is any deviation in the case of export to overseas. Please let us know.

Reply
Exports include supplies to SEZ as per section 16 of IGST as follows:

SECTION 16 of IGST Act
(1) 'zero rated supply' means any of the following supplies of goods or services or both, namely:''
(a) export of goods or services or both; or
(b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit.

Since your question was centric to SEZ therefore, we replied accordingly. However the same provisions will be applicable on Overseas Exports also. (Reply dt. 09/07/2021)