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An Overview of the Duty Drawback Scheme

All Industry Rates (AIR) of Duty Drawback :

The AIR of Duty Drawback are notified for a large number of export products every year by the Government after an assessment of average incidence of Customs, Central Excise duties, Service Tax & Transaction Cost suffered by the export products. The AIR are fixed after extensive discussions with all stake holders to solicit relevant data, which includes the data on procurement prices of inputs, indigenous as well as imported, applicable duty rates, consumption ratios and FOB values of export products. Corroborating data is also collected from Central Excise and Customs field formations. This data is analyzed and forms the basis for the AIR of Duty Drawback.

The existing All Industry Rates of Draw back of MMF textiles for some of the main products falling under the purview of the Synthetic & Rayon Textiles Export Promotion Council are as follows :

Brand Rate of Duty Drawback :

In cases where the Rate of Drawback has not been determined, the exporter may apply in writing to the to the Commissioner of Central Excise having jurisdiction over the manufacturing unit for determination of the Rate Drawback within 60 (sixty) days from the date of “Let Export Order” given on the relevant Shipping Bill. The Commissioner of Central Excise may allow a further period of 30 (thirty) days if it is satisfied that the manufacturer or exporter was prevented by sufficient cause from filing the application within sixty days. The Rate of Drawback determined in such cases is commonly known as “Brand Rate of Drawback”.

This Rate of Drawback so determined is applicable to the specified goods exported by a particular exporter during a particular period mentioned in the order issued by the Central Excise.

Procedure for Claiming Duty Drawback Under EDI System

table_ddsFilling of EDI Shipping Bill : The exporter has to file a shipping bill in Electronic Data Interchange (EDI) for export of goods under a claim for drawback. The electronic shipping bill itself shall be treated as the claim for drawback and there is no need for filing separate drawback claims. The scheme of computerized processing of Drawback claims under the Indian Customs EDI System is applicable for all exports except in respect of DBK claims relating to cases of re-export of imported goods under Section 74 of the Customs Act, 1962. Shipping Bills in respect of goods under claim for drawback against Brand rates would also be processed in the same manner, except that drawback would be sanctioned only after the original brand letter is produced to AC Export and is entered in the system. The exporter should specify the S.S No 98.01 for such provisional claims.

“Let Export Order (LEO)” and Actual Shipment : After arrival of goods at the docks and subsequent examination / inspection and appraisal, shipment is allowed “Let Export Order (LEO) and the CHA of the exporter is informed. The CHA hands over copy of the shipping bill signed by the Appraiser “Let Export” to the steamer agent. The agent then approaches the proper officer for allowing the shipment. The Customs Preventive Officer supervising the loading of container and general cargo in to the vessel may give “Shipped on Board” approval on the exporter’s copy of the shipping bill.


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