drawback”, in relation to any goods manufactured in India, and exported, means the rebate of duty chargeable on any imported materials or excisable materials used in the manufacture of such goods;
Categories of Drawback
Drawback is basically divided into two categories as per provisions of Section 74 and 75 of the Customs Act, 1962.
1. Section 74 of Customs Act allows drawback on re-export of duty paid imported goods, including passenger’s baggage, in the same position in which these were imported. Such goods must be identifiable as original imported goods. Details appear in Chapter 18.
2. Section 75 of customs Act allows drawback on physical exports (other than re- exports) of finished products wherein duty [excise/customs (import) on indigenous or imported] paid inputs have been used.
Besides, drawback is also admissible under Deemed Export Policy, as detailed in Chapter 21.
Hence, drawback is now admissible on:
– Physical Exports
– Deemed Export
Drawback falls under following rules :
Duty drawback is nothing but a refund of duties which paid directly or indirectly to the customs. If, you imports raw material / components, used in manifesting of export goods, then it is eligible to get the refund of duty, known as drawback. It catagorised by 3 ways; under duty drawback rules 2017 as follows;
- All Industry rate of duty drawback: It comes under Rule 3. It is determined by the government and government gives a fixed amount on FOB value of goods. No need of any imports of raw material / component.
- Brand Rate of drawback: It comes under Rule 6. If your product is not having all industry rate of drawback but, if, imported raw material / components used for producing of finished goods and exported. It comes under the said rule. Need to file an application under this rule to the customs were the export done. If it is so, then, file a shipment under drawback schedule 9801. Application to be processed within 3 month from the date of export.
- Special Brand Rate of drawback: It comes under Rule 7. If your product is having all industry rate of drawback. But, if imported raw material / components had a duty more than 80% of All Industry Rate of duty drawback for producing of finished goods and exported then, it comes under the said rule. Need to file an application under this rule to the customs where the export done. If it is so, then, file a shipment under drawback schedule 9807. Application to be filed within 3 month from the date of export.