Write a note on Rupee Deemed Export Credit.

A deemed export transaction is one in which goods are supplied to a project in India itself which are funded by International / Multilateral agencies or where goods are supplied to units in SEZs or foreign shipping companies calling on Indian ports, supply of goods to foreign tourists etc., such that the proceeds of such goods supplied will be paid in foreign currencies. Such transactions are treated as prima facie export transactions and enjoy incentives and other concessions given to normal export transactions. Pre-shipment and Post-shipment credit facilities granted to Rupee Deemed Export Credit transactions are similar to finance / credit extended under Rupee Export credit Pre-shipment as well as Post-shipment as described herein. However in deemed export transactions the date of supply to the projects/SEZ units / foreign tourists is taken as date of export. Also the value of the transaction will be based on Free on Rails (FOR) basis instead of usual Free on Board (FOB) basis, usually associated with export transactions.