Deemed Export [Last Updated by: shahriar on 2017-10-03]
Export in general can be defined a cross border sale of goods. Deemed Export is a type of export where goods are sold to some domestic buyer who would ultimately sell it to a foreign buyer. For example - Company A and Company B are in USA and Company C is in Canada. If Company A sells goods to Company B and Company B sales that goods to Company C, then -
* Company C is the importer.
* Company B is the exporter.
* Company A is the Deemed Exporter.
Generally deemed exporter are the seller of the raw material to manufacturer producers who export finished goods to foreign countries.
The concept of deemed export is commonly used by the government to determine who should receive export incentive. Here is an example.
Imagine a market with two yarn producers. The government offers 5% cash incentive for yarn export. Now one of the yarn producers sale yarns to local household and the other sells to an exporter. Being a deemed exporter, the 2nd producer is entitled for 5% incentive. Deemed exporter may also be the supplier of another deemed exporter. In our above example, supplier of cotton to the 2nd yarn producer will be considered as a deemed exporter.
While a direct export often requires special permit or export license, a deemed export usually does not require any permit.