Duty Drawback for SEZ units

[parag shetye]

Dear Experts,

We are a SEZ unit and procured goods from DTA supplier which is required to make our finish products which is to be exported to various countries. Can we claim duty drawback on the supplied goods by DTA suppliers to our SEZ unit? If yes then on which value Drawback will be calculated? On value of good supplied by DTA or on value of Finish goods exported by SEZ unit?

Regards..

Parag Shetye

[KASTURI SETHI]

Answer is yes. Drawback is claimed of only Customs duty, IGST and Compensation Cess paid at the time of import of inputs to be used in the manufacture of goods meant for export. Here is not the question of VALUE of input or final product but question of duty paid on INPUTS and to be claimed as drawback. DTA supplies to SEZ are entitled for export benefits like Drawback, claim of rebate & advance authorization, etc.

[DR.MARIAPPAN GOVINDARAJAN]

Duty draw back is eligible only on the supply of goods by DTA to your SEZ unit.

[Spudarjunan S]

Exports made by SEZ are not eligible for All Industry Rate Duty Drawback - refer Customs and Central Excise Duty Drawback Rules, 2017 - Notification no. 89/2017- Cus (N.T) dated 21st September 2017.

SEZ are not eligible to Duty Drawback since they are considered outside the territory of India for customs purpose.

In your case the DTA supplier can go for Duty Drawback for the supplies made by him to you(SEZ).

AI Summary

Duty drawback entitlement on inputs: DTA suppliers, not SEZ exporters, claim refunds for duties paid on imported inputs used for export. Duty drawback refunds Customs duty, IGST and Compensation Cess paid on imported inputs used to manufacture exported goods; entitlement is tied to duty paid on inputs rather than the exported product's value. SEZ units are treated as outside customs territory for the All Industry Rate Duty Drawback and therefore exports from SEZs do not qualify under that scheme. Where a DTA supplier supplies inputs to an SEZ unit, the DTA supplier - as the duty-paying party - is the claimant entitled to duty drawback and related export benefits.