DUTY DRAWBACK :
Duty drawback is an export incentive scheme.
| Basis | Drawback allowable on re-export of duty paid goods-section 74 | Drawback on materials used in manufacture of exported goods-section 75 | |||||||||||||||||
| 1.Meaning of drawback | It means refund of duty paid on importation of the goods which are exported outside India. | It means, the rebate of duty or tax ,as the case may be paid on any imported materials or excisable materials or input services which are used in the manufacture of the goods that are exported outside India . | |||||||||||||||||
| Identity of goods exported | The goods must be capable of being easily identified | There is no criteria of such identification since the inputs are manufactured or processed before their export | |||||||||||||||||
| Eligibility | All goods are eligible for drawback subject to their identification | Drawback is available only in respect of identified goods | |||||||||||||||||
| User criteria | Duty drawback shall be allowed even if the imported goods are taken into use and then exported. | If the goods manufactured from imported materials are used in India and subsequently exported then no duty drawback shall be allowed ( subject to certain exceptions ) | |||||||||||||||||
| Nature of goods exported | The exported goods should have been imported and customs duty be paid thereon. | The goods exported may be manufactured or processed from imported or indigenous inputs or by utilizing input services | |||||||||||||||||
| Rate of duty drawback | Duty drawback is allowed @ 98% of the import duty ,if the goods are exported without use AND in case if they are taken into use drawback is allowed at notified rate depending upon the period of use.
Notified Rate is based on length of period between the date of clearance for home consumption and the date when goods are placed under customs control for export.
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Duty drawback is allowed as per All Industry Rate notified by the Drawback Directorate .In case ,if no rate is notified , then the exporter can apply for brand rate and in case if duty drawback as per All Industry Rate is less than 80% of the duty paid on importation , then the exporter can apply for Special brand rate. | |||||||||||||||||
| Time limit of exportation of goods | The goods must be exported within 2 years from the date of payment of duty or such extended time as allowed by Board. | There is no time limit for such exportation | |||||||||||||||||
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Requirements of value addition |
There is no requirement of minimum value addition
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There should not be any negative value addition and minimum value addition must be achieved, if specified.
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| Realisation of export –sale proceeds in convertible foreign exchange | There is no such requirement | If the export proceeds are not brought in convertible foreign exchange within time limit specified under FEMA, 1999 then the drawback so granted shall be recovered back. | |||||||||||||||||
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Rules framed |
Re-export of imported goods (Drawback of Customs Duties) Rules ,1995 has been framed. |
Customs Central Excise Duties and Service Tax Drawback Rules, 1995 has been framed. |
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| Export in form of Baggage | The goods can be exported in form of baggage. | The goods cannot be exported as baggage | |||||||||||||||||
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No duty drawback in goods on export ,if they have been used in India after importation
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· Wearing Apparels · Tea chests · Exposed cinematograph film passed by the board of film censors in India · Unexposed photographic films, paper and plates and X-Ray films.
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