ELIGIBILITY of DBK

[Kishan Barai]

What is the maximum amount which can be charged on invoice to avail DBK. I have seen that Indian customs do not provide drawback if the product is overpriced but what is the rate of overprice 55% 150% 155% or other ??

Please enlighten.

[Suryanarayana Sathineni]

Dear Friend,

There is no such restriction on the export value if the transaction is genuine. However, if the Department is in doubt about the transaction or the integrity of the exporter, they can ask for additional data including justification on the invoice value as part of their investigation. If they are able to prove that the the exporter is over invoiced the price for claiming undue DBK, then they may restrict the DBK amount based on comparison of values of contemporary exports during the relevant time.

Best Regards

S Suryanarayana

[v SRINIVASAN]

Dear Sir,

Once customs authority has verified and assessed on clearing the documents on after verification of all documents at the valuation prices and others comparably and past records. The excess valuation can not be found out latter on based on other sources. Hence assessment should not be recalled once again based on the documents. Please note the point has to be looked into before taking for revaluation since it will affect the business of the company.

Thanks

V.SRINIVASAN

[Kishan Barai]

Thanks a lot Suryanarayana Sir.

[CSSANJAY MALHOTRA]

Dear Mr. Kishan,

Refer to the Custom Valuation Rules (Rule 4,5 & 6).

Besides this just FYI, Central Excise Law provides that the Assessable Value arrive at under Section 4 of Central Excise Act for Exports should not have substantial / significant variation in comparison to the Domestic price of Goods. (Variance may be account of Freight, Commission within permissible range, etc) but not significantly in profit margin...or else the party has to establish the evidence of charging higher price to claim Duty Rebate.

 

[Kishan Barai]

Thanks a lot CS SANJAY MALHOTRA Sir

[Suryanarayana Sathineni]

Dear Friend,

If I am right, there is on specific column in the Bill of Entry to mention the "Present Market Value" which represents the nearest market value . Also the Department can proceed with the provisional assessment in case of doubt about valuation and final assessment would be done after submitting the relevant information to the satisfaction of the Department and only after the Department is satisfied then only DBK amount would be released.

Hope it is clear

Best Regards

Suryanarayana

[Kishan Barai]

Yes Sir. Thank You

AI Summary

DBK eligibility: genuine invoice values allowed but department can restrict drawback if over invoicing is proven. There is no absolute cap on declared export value for entitlement to DBK if the transaction is genuine, but Customs may investigate and require supporting data; proven over invoicing can lead to restriction of drawback by reference to contemporaneous export values. Provisional assessment may be applied when valuation is doubtful, with final assessment and release of DBK only after the Department is satisfied. Export assessable value should not substantially diverge from domestic price without evidence justifying a higher export price.