Bank Charges deducted from Foreign Payment

[Ashok Chopra]

Respected Forum,

I am manufacturer-exporter receiving short foreign payment of $ 25.00 on account of Bank Charges of Foreign Bank. and in another case i am discounting bill from foreign bank, they are sending me payment after deducting their charge and interest.

It is not clear to me whether i should return back proportionate drawback to custom department on account of deduction made by foreign bank on account of bank charges and bank interest.

Please guide me accordingly. Also please provide me any clarification/guidlines/notification of any department or court order in this regard.

Thanks and regard

AI Summary

Manufacturer Faces Dilemma Over Duty Drawback Return Due to Bank Deductions; Rule 16A Consulted for Guidance. A manufacturer-exporter is concerned about whether to return a proportionate duty drawback to the customs department due to foreign bank deductions for charges and interest on received payments. The forum received five replies. One response advised consulting Rule 16A of the Customs, Central Excise & Service Tax Duty Drawback Rules and suggested returning the drawback with interest. Others argued that bank charges do not necessitate a drawback reversal, as the full consideration is received before deductions. Two respondents agreed that bank charges are not a criterion for returning the duty drawback.