Duty Drawback Without BRC: A Rs.1 Lakh Claim That Cost Rs.10 Lak

A single tick-box changed everything for one exporter. They claimed duty drawback worth Rs.1 lakh. Two months later, they spent Rs.10 lakh fixing the mess. The missing piece. One document called BRC.

What Went Wrong With This Duty Drawback Claim

Duty drawback feels like automatic money. You export goods, tick a box, and credits flow into your account. But Customs treats this differently. For them, every drawback claim is a contract. You get the benefit only if you prove the export was genuine.

That proof is the Bank Realisation Certificate. The BRC confirms that foreign exchange actually came into India against your shipment. Without it, your drawback claim hangs in limbo.

Our client ignored this. When Customs sent the first notice asking for BRC submission, they were busy with other fires. The second notice came and went. They assumed the system would forget.

It did not forget.

How One Missing BRC Blocked Everything

Customs systems are now interconnected. When you default on BRC compliance, the impact spreads fast. Our client woke up one morning to find their IEC blocked. Not at one port. Across all ports.

Their containers at JNPT could not clear. A shipment at Mundra got stuck. Production schedules collapsed because raw materials were held up. Their overseas buyer, tired of delays, cancelled the order and moved to a competitor.

The next two weeks were pure damage control. Running between banks for BRC copies. Filing refund applications for drawback they should not have claimed. Paying lawyers to draft representations. Watching demurrage charges pile up daily.

The final tally crossed Rs.10 lakh. For a benefit worth Rs.1 lakh.

Why Exporters Fall Into This Duty Drawback Trap

The problem is how we think about export incentives. Most exporters treat duty drawback as extra income. Something the government gives because you exported. This mindset is dangerous.

Drawback is conditional money. The condition is simple but strict. You must receive payment from your foreign buyer and prove it through proper banking channels. If payment does not come, you either refund the drawback or face consequences.

Many exporters claim drawback on every shipment without checking payment status. Some buyers pay late. Some payments get stuck in banking delays. Some shipments face quality disputes. In all these cases, your BRC gets delayed or does not come at all.

Meanwhile, Customs has already credited your account. Now they want proof. And they want it within a specific timeline.

How to Stay Compliant With Duty Drawback Rules

The fix is not complicated. It just needs discipline.

Start by tracking every invoice where you claimed drawback. Maintain a simple register linking shipping bills to expected payment dates. When payment comes, get the BRC from your bank immediately. Do not wait for Customs to ask.

If any notice arrives from Customs, respond within 15 days. This timeline matters. Missing it triggers escalation in their system.

For shipments where payment is uncertain, think twice before claiming drawback. The benefit is typically 1-2% of FOB value. The compliance headache of refunding it later is not worth such small amounts.

Set calendar reminders for BRC follow-ups. Your memory will fail you. Systems will not.

The Real Cost of Ignoring Export Compliance

Export incentives come with strings attached. Duty drawback, RoDTEP, MEIS in the past—all of them require documentation and proof. The government gives benefits to genuine exporters, not to those who game the system.