Drawback

Under Duty Drawback Scheme ( DBK ) relief of Customs and Central Excise Duties suffered on the inputs/components used in the manufacture of goods exported is allowed to Exporters. The admissible duty drawback amount is paid to exporters by depositing it into their nominated bank account. Section 75 of the Customs Act, 1962 and Section 37 of the Central Excise Act, 1944, empower the Central Government to grant such duty drawback. Customs and Central Excise Duties Drawback Rules, 1995 have been framed outlining the procedure to be followed for the purpose of grant of duty drawback (for both kinds of duties suffered) by the Customs Authorities processing export documentation.

Under Duty Drawback Scheme, an exporter can opt for either All Industry Rate (AIR) of Duty Drawback Scheme or brand rate of Duty Drawback Scheme. Major portion of Duty Drawback is paid through AIR duty Duty Drawback Scheme which essentially attempts to compensate exporters of various export commodity for average incidence of customs and Central Excise duties suffered on the inputs used in their manufacture. Brand rate of duty drawback is granted in terms of rules 6 & 7 of Customs and Central Excise Duties Drawback Rules, 1995 in cases where the export product does not have any AIR or duty drawback rate, or where the AIR duty drawback rate notified is considered by the exporter insufficient to compensate for the Customs/Central Excise duties suffered on inputs used in the manufacture of export products. For goods having an AIR the brand rate facility to particular exporters is available only if it is established that the compensation by AIR is less than 80% of the actual duties suffered in the manufacture of the export goods.

Under Duty Drawback Scheme, an exporter can opt for either All Industry Rate (AIR) of Duty Drawback Scheme or brand rate of Duty Drawback Scheme. Major portion of Duty Drawback is paid through AIR duty Duty Drawback Scheme which essentially attempts to compensate exporters of various export commodity for average incidence of customs and Central Excise duties suffered on the inputs used in their manufacture. Brand rate of duty drawback is granted in terms of rules 6 & 7 of Customs and Central Excise Duties Drawback Rules, 1995 in cases where the export product does not have any AIR or duty drawback rate, or where the AIR duty drawback rate notified is considered by the exporter insufficient to compensate for the Customs/Central Excise duties suffered on inputs used in the manufacture of export products. For goods having an AIR the brand rate facility to particular exporters is available only if it is established that the compensation by AIR is less than 80% of the actual duties suffered in the manufacture of the export goods.

Duty Drawback facilities on re-export of duty paid goods is also available in terms of Section 74 of Customs Act, 1962. Under this Scheme part of the customs duty paid at the time of import is remitted on re-export of the goods subject to identification and prescribed procedure being followed.


Limitations on Drawback Admissibility:

The Customs Act lays down certain limitations and conditions which exporters claiming drawback have to meet/fulfill. Thus, no drawback is admissible under Section 75 if the market price is less than the amount of drawback claimed. Drawback is also not admitted if the claim is less than Rs.50/- in individual shipments. Government has also powers to deny or admit drawback claim subject to laid down conditions where there is likelihood of goods exported being smuggled back. These powers have been used for exports to Nepal where normal provisions of duty drawback are not applied.

The Drawback Rules also further lay down in Rule 8 some further limitations, where rate is less than 1%, and this may be referred to. Government has also powers to deny drawback facility in such cases where export of goods if less than the value of imported material used in their manufacture. If necessary, certain minimum value addition over the value of imported materials can also be prescribed before granting drawback. It is also pertinent to note that the drawback is permitted to encourage exports and essentially there must be export proceeds repatriation. Though prior repatriation of export realization is not pre-requisite, the law prescribes that if sale proceeds are not received within the stipulated period, the drawback paid will be recoverable by the Government as per procedure laid down in drawback.


Message:

This Commissionerate has set itself the challenge to remove all pendency in critical areas of work especially Drawback and Refunds that directly impact Exporters and Importers.

It may be appreciated that while all efforts are being made by the officers of this Commissionerate to dispose pending matters, cooperation of the Exporters and the Importers is required to expedite the pace of disposal.


Related Files

DETAILS OF DRAWBACK SHIPPING BILLS, PENDING FOR QUERY REPLY- AS ON 24-10-2016 view

DETAILS OF DRAWBACK SHIPPING BILLS, FOR WHICH dbk AMOUNTS WERE MADE "ZERO" DURING THE PROCESSING OF REGULAR CLAIM- AS ON 24-10-2016 view

Details of Drawback Shipping Bills, for which BRC is pending - As on 09-08-2016. view

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DRAWBACK SPECIAL DRIVE- STATUS REPORT view

ALL INDUSTRY RATE DRAWBACK- UNDER EDI MODULE- NON- SUBMISSION OF DOCUMENTS FOR QUERIES RAISED BY THE DEPARTMENT AND REALIZATION OF EXPORT PROCEEDS-REG. view

ALL INDUSTRY RATES OF DRAWBACK AND OTHER DRAWBACK RELATED CHANGES-REG. view

DETAILS OF SHIPPING BILLS PENDING BRCs view

Intimation of second Personal Hearing-Recovery of Drawback for non-realization of export proceeds-reg. view

Intimation of second Personal Hearing-Recovery of Drawback for non-realization of export proceeds-reg. view