TaxTMI 
TaxTMI 
Duty Drawback
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.... goods do not get Drawback if exported 18 months after import. [Refer Notification No.19-Cus., dated 6-2-1965] 1.4 All cases of drawback processing or denial under section 74 are to be handled byway of detailed speaking order, following the principles of natural justice, on the issue of compliance to Rule 5 of Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995 relating to manner and time of claiming drawback, identification, determination of and extent of use and other attendant aspects. Each such order gets examined by the Commissioner for its legality and propriety. [Refer Circular No.35/2013-Cus., dated 5-9-2013] 2. Duty drawback on export of manufactured goods: 2.1 Duty Drawback rebates duty or tax chargeable on any imported / excisable materials and input services used in the manufacture of export goods. The duties and tax neutralized under the scheme are (i) Customs and Union Excise Duties in respect of inputs and (ii) Service Tax in respect of input services. Duty Drawback is of two types: (i) All Industry Rate and (ii) Brand Rate. The legal framework is provided by Sections75 and 76 of the Customs Act, 1962 and the Customs and Central Excise Duties ....
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....pplication has to be made before the Commissioner of Central Excise having jurisdiction over the manufacturing unit. [Refer Circular No.13/2010-Cus., dated 24-6-2010 and Circular No. 13/2014-Cus dated 18.11.2014 ] 2.8 The application for fixation of brand rate is to include, inter alia, details of materials/ components/ input services used in the manufacture of goods and the duties/taxes paid on such materials/components/input services. 2.9 In brand rate of drawback, the exporter is compensated the incidence actually incurred in the export product based on a verification of documents and proof of usage of actual quantity of inputs /services utilized in the manufacture of export product and duties/tax paid thereon. 2.10 Five categories of exporters can seek provisional brand rate letters based on their declaration subject to post verification. Other exporters who actually file application for fixation of Brand Rate under rule 7 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 may also provisionally seek drawback equivalent to AIR pending verification. A time limit is prescribed for Central Excise Commissionerates to issue such provisional brand rate le....
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....5 lay down certain limitations and conditions for grant of duty drawback. For example, no duty drawback shall be allowed where the drawback due in respect of any goods is less than ₹ 50/- or in respect of any goods the market price of which is less than the amount of drawback due thereon. No amount or rate of drawback shall be determined in respect of any goods, the amount or rate of drawback of which would be less than 1% of FOB value of export thereof except where the amount of drawback per shipment exceeds ₹ 500/-. No drawback is allowed where value of export goods is less than the value of imported material used in their manufacture. In this regard, if necessary, certain minimum value addition over the value of imported materials can also be prescribed by the Government. 5.2 The drawback amount or rate determined under Rule 3 of Drawback Rules 1995 shall not exceed one-third of the market price of the export product. 5.3 In case the Central Government forms an opinion that there is likelihood of export goods being smuggled back into India, the Government may not allow drawback or allow it subject to specified conditions or limitations. Notifications have been issu....
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....ar No.46/2011-Cus., dated 20-10-2011] 7.2 The higher rate of AIR is applicable when Cenvat facility has not been availed on any of the inputs or input services used in the manufacture of the export product. If claim is for the higher rate at time of export, the processing at export stage should specifically ensure availability of "Non-availment of Cenvat Certificate", otherwise the shipping bill needs amendment at export stage to show the claim for lower AIR. [Refer Instruction No. 609/156/2013-DBK., dated 13-3-2014] 7.3 Commissioners are also to ensure that exporters do not avail refund of service tax paid on taxable services which are used as input services in the manufacturing or processing of export goods through any other mechanism while claiming the higher AIR. [Refer Circular No.19/2006-Cus., dated 13-7-2006] 7.4 The field formations are to ensure periodic sample checks and verifications with respect to export declarations accepted for AIR drawback purposes and these are to be regarded as audit checks and their proper record maintained. These include checks on value, present market value, non-availing of Cenvat facility on inputs and input services/reversal of Cenvat ....