exim incentives drawback

7/29/2019 EXIM Incentives Drawback

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Duty Drawback Scheme


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Drawback Rate

The drawback rates are determined on the basis ofcertain broad parameters including, theprevailing prices of inputs, standard input/outputnorms (SION) published by DGFT, share ofimports in the total consumption of inputs andthe applied rates of duty.

As education cess is being collected as duties ofexcise/customs, the element of education cesshas been factored in the drawback rates.

The incidence of duty on HSD/Furnace Oil hasalso been factored in the drawback calculation.


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Drawback Scheme Features

A significant feature of the new Drawback Schedule is thatbarring a few exceptions the rates on all export productshave been expressed in ad valorem terms in lieu ofearlier specific rates, i.e. Metric Tonne /kg etc.

Though the weight based drawback is reported to be lessvulnerable to abuse, the ad valorem rates have the dualvirtue of first being fair to the exporters and secondly,serve the policy objective of encouraging the export ofvalue added items.

Therefore, as a conscious policy decision, it has been

decided to express drawback rates in ad valorem terms.The associated drawback caps have, however, been fixed

in specific items, i.e. weight or piece, as the case maybe.


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It has adopted the HS classification as thebasis for fixing drawback rates.

The new Drawback Schedule is now fullyaligned with the HS Nomenclature at thefour digit level.

While for major export items the drawbackrates have been worked out at fourdigit/six digit/eight digit level, for others amixed classification, based on precedentand convenience, has been used forprescribing the drawback rates.


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Procedure

The Customs has already implemented EDI at 23 majorcustoms locations covering about 80% of the imports andexports.

Under the system, the shipping bill itself is treated as theclaim for drawback.

The drawback claim is processed on line and the amount iscredited into the exporters account in the bank designated bythe Customs immediately after let export order and filing ofmanifest by the carrier without any additional paper work.

Commissioners have also been instructed to ensure that allgrievances or problems raised by exporters on drawback

claims are addressed within 72 hours and, if this is notpossible in any case, to bring the matter to the notice ofMember (Customs/Export Promotion) in CBEC. Exportersmay also bring any delay beyond 72 hours to the notice ofMember (Customs/Export Promotion).


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Drawback Rates

The Ministry has announced the revised

All Industry Rates of Duty Drawback vide

notification No. 36/2005-Cus (NT) dated

2.5.2005. These rates shall come intoforce with effect from 5.5.2005.


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Exceptions

The rates of drawback specified in the saidSchedule shall not be applicable to export of acommodity or product if such commodity orproduct is-

manufactured partly or wholly in a warehouseunder section 65 of the Customs Act, 1962 (52of 1962),

manufactured or exported in discharge of

export obligation against an Advance Licenceissued under the Duty Exemption Scheme ofthe relevant Export and Import Policy and theForeign Trade Policy:


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Exceptions

manufactured or exported by a unit licensed ashundred per cent. Export Oriented Unit in termsof the provisions of the relevant Export andImport Policy and the Foreign Trade Policy;

manufactured or exported by any of the unitssituated in free trade zones or exportprocessing zones or special economic zones;

manufactured or exported by availing the

rebate of duty paid on materials used in themanufacture or processing of such commodityor product in terms of rule 18 of the CentralExcise Rules, 2002;


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Exceptions

manufactured or exported availing of the facilityunder the Duty Entitlement Pass Book Schemeand manufactured or exported availing of thefacility under the Duty Entitlement Pass BookScheme

Wherever specific rates have been providedagainst tariff item in the Schedule, thedrawback shall be payable only if the amountis one per cent or more of free on boardvalue, except where the amount of drawbackper shipment exceeds five hundred rupees.


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CENVAT Facility

The expression when cenvat facility has not been availed, used inthe said Schedule, shall mean that the exporter shall satisfy thefollowing conditions, namely :-

The exporter shall declare, and if necessary, establish to thesatisfaction of the Assistant Commissioner of Customs or Assistant

Commissioner of Central Excise or Deputy Commissioner ofCustoms or Deputy Commissioner of Central Excise, as the casemay be, that no cenvat facility has been availed for any of the inputsused in the manufacture of the export product;

if the goods are exported under bond or claim for rebate of duty ofcentral excise, a certificate from the Superintendent of Customs orSuperintendent of Central Excise in-charge of the factory ofproduction, to the effect that no cenvat facility has been availed forthe goods under export, is produced


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Schedules 1 to 5

Tariff

Item

Descript

ion

of

Goods

Unit DBK When

CENVat

facility has

not beenavailed

DBK When

CENVat

facility has

been availed

DBK

Rate

DBK

Cap

per

unit in

Rs.

DBK

Rate

DBK

Cap

per

unit in

Rs.

exim incentives drawback

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