Drawback [Rule 3]: 

Drawback may be allowed at such amounts and such rates determined by Government and reduced by any amount of exemption availed on the export of goods (reduced rate of duty or tax paid/Cenvat Credit availed).

No drawback in certain cases: No drawback is allowed in the case of the following:

(i) Packing materials for export of tea, except teachests.

(ii) Goods manufactured out of duty free materials.

(iii) Jute batching oil used in manufacture jute yarn, twine etc.

(iv) Packing material used for jute yarn, fabrics etc.

(v) Wheat falling under heading 1001 of Customs Tariff.

Factors considered while determining amount/rate of drawback: In determining the amount or rate of drawback under this rule, the Central Government shall have regard to –

(a) the average quantity or value of each class or description of the materials from which a particular class of goods is ordinarily produced or manufactured in India;

(b) the average quantity or value of the imported materials or excisable materials used for production or manufacture in India of a particular class of goods;

(c) the average amount of duties paid on imported materials or excisable materials used in the manufacture of semis, components and intermediate products which are used in the manufacture of goods;

(d) the average amount of duties paid on materials wasted in the process of manufacture and catalytic agents:

However, if any such waste or catalytic agent is re-used in any process of manufacture or is sold, the average amount of duties on the waste or catalytic agent re-used or sold shall also be deducted;

(e) the average amount of duties paid on imported materials or excisable materials used for containing or, packing the export goods;

(f) any other information which the Central Government may consider relevant or useful for the purpose.