| IMPORTS | EXPORTS | DRAWBACK |
1. What is "All Industry Rate of
Drawback" ?
2. Whether there is need for filing
separate drawback claims?
3. What is the procedure for claiming
drawback under the EDI system?
4. In cases where the Rate of
Drawback is not fixed what is the procedure to claim Drawback?
5. In cases where the amount or Rate
of Drawback is already determined is found low by the exporter
what is the procedure to be followed to get the correct amount or rate fixed?
6. What are the precautions that the
exporters should take so that Drawback claims are not held up and
are sanctioned expeditiously?
7. What is the time limit to pay
Drawback by the department when the goods are exported by post? Is
there any provision to pay
interest when there is delay in payment of Drawback? If so, at what rate is it
paid?
8. Where an erroneous or excess
payment of 'Drawback' and interest is paid to an exporter , how
does the
department, recover it?
9. In case of exports where the
amount of Drawback has been paid but the sale proceeds in
respect of
such export goods have not been realized, what is the course of action?
10. What is the action required on
part of the exporters for Systems Alert
for Monitoring Realization of
Export Proceeds in EDI as per the Board's circular
No. 5/2009-Cus. dated 2nd February, 2009?
11. What is the drawback under Section
74 of the customs Act 1962?
12. Is it necessary to file a separate
claim for drawback on the goods re-exported, other by post? If so what
is the time limit?
13. Is the full amount of duty paid at
the time of import, refundable when such goods are re-exported?
What
are the other conditions to claim Drawback under Section 74 of Customs Act 1962?
14. What is the procedure for claiming
drawback under Section 74 of Customs Act 1962 the goods
are
re-exported other than by post?
Q1. What is "All Industry Rate of Drawback" ?
A. Under Rule 3 of the Customs and Central
Excise duties Drawback Rules, 1995, the Government of India fixes the rates of
Drawback on various goods generally exported by different exporters. These rates are fixed taking into
consideration the amount of Customs duty or the Central Excise duty or both
paid on the inputs of the export product.
These rates are normally reviewed once in a year or whenever there is a
change in the duty structure on the inputs used in the export product. Any exporter can claim the All Industry Rate
of Drawback as long as the export is in compliance with the various other
provisions of Section 75 and 76 read with the Rules made there under.
Q2. Whether there is need for filing separate
drawback claims?
A. In case of goods manufactured in India
exported under a manual shipping bill for a drawback claim under Section 75 of
the Customs Act, 1962,
Rule 13 of the Customs, Central Excise Duties and Service Tax
Drawback Rules, 1995 provides that Triplicate copy of the Shipping Bill shall
be deemed to be a claim for drawback and said claim for drawback shall be
retained by the proper officer making an order permitting clearance and loading
of goods for exportation under section 51.
Where
the exporter has exported the goods under electronic shipping bill in
Electronic Data Interchange (EDI) under the claim of drawback, the electronic
shipping bill itself shall be treated as the claim for drawback and there is no
need for filing separate drawback claims.
Q3. What is the procedure for claiming drawback
under the EDI system?
A. 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. At JNCH the
scheme of computerised 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. The procedure for claiming drawback under
the EDI system is explained below:-
In
the EDI system the exporter are required to open their accounts with the Bank
nominated by the Custom House or a branch anywhere in
For
export of goods under claim for drawback, as per Rule 13 of the Customs,
Central Excise Duties and Service Tax Drawback Rules, 1995 the exporters will
file the claim for drawback accompanied by the following documents:-
(i) copy of export contract or
letter of credit, as the case may be,
(ii) copy of Packing list,
(iii) copy of ARE-1 wherever applicable,
(iv) insurance certificate, wherever necessary, and
(v)
copy of communication regarding rate of drawback where the drawback claim is
for a rate determined by the Commissioner of Central Excise or the Commissioner
of Customs and Central Excise, as the case may be under rule 6 or rule 7 of
these rules.
Under
PUBLIC NOTICE- 54
/07 of JNCH the following documents are required to be produced at the time of
examination of the cargo.
1. CENVAT Certificate/ Self
declaration known as Annexure 1 when the Central Excise portion of the drawback
is claimed.
2. Duty-free finished Leather
Declaration in case of leather and leather articles.
3. Chartered Engineer’s certificate wherever
applicable.
4. Invoice giving complete description of the
goods under export. Invoice with the declaration of wool content in case of
woolen carpets/floor covering.
5. Packing list giving weight/ quantity of
individual items when the drawback is based on unit weight/ quantity.
6.
Test-Reports/ Sample Drawn by Central Excise authorities in case of Factory
Stuffed Containers in terms of P.N.03/2007 dtd.
09.02.2007 in case Drawback is based on the composition.
7.
NOC from the respective agencies/ authorities like
WLRO, ADC, APEDA, etc. wherever applicable.
The
steamer agents will transfer the EGM electronically to the system so that the
physical Export of goods is confirmed.
The system will process the claims only on receipt of the EGM.
After
filing of EGM and printing of EP Copy the shipping bills automatically move
online to Drawback Queue in the EDI System for sanction. It may be noted that
unless EGM is filed and EP Copy is printed, the shipping bills do not move
online to Drawback Queue and such claims cannot be said pending with the
department for drawback purpose.
The
drawback claims are processed through the system on first come first served
basis. Superintendent is the competent
authority for sanctioning drawback up to Rs. one lakh and Assistant Commissioner for above one lakh. Superintendent has to confirm whether the goods under
drawback claim have been properly classified or not. He can change the
classification of the goods and on changing classification; the system
recalculates drawback amount.
The
status of Shipping Bills and sanction of drawback claim can be ascertained from
the EDI Service Centre or Drawback Helpdesk.
Status of S/Bill and query can also be ascertained online through
automatic email by sending e-mail to docktrack.jnch@icegate.gov.in
and mentioning the subject of the mail as exp:dbkpend:sbno:SB1,SB2,SB3 or exp:dbkpend:iec:<IEC NO> , to get status of drawback claims for particular SBs or of all drawback claims, as provided under facility notice no. 10/2008
dated 18.01.2008.
On
raising of a query the claim moves out of drawback
queue to Exporter queue in the System. Such claims are not regarded pending
with the Department and are deemed to have been returned to the exporter with
query or deficiency memo as per Rule 13 of the Customs, Central Excise Duties
and Service Tax Drawback Rules, 1995. As per this Rule where the exporter
resubmits the claim for drawback after complying with the requirements
specified in the deficiency memo, the same will be treated as a claim filed
under sub-rule (1) of Rule 13 for the purpose of Section 75A of the Customs
Act, 1962. The exporter or his authorised
representative may obtain a printout of the query/deficiency from the Service
Centre if he so desires. The claim will
come in Queue of the system as soon the reply is entered.
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.
All
the claims sanctioned during a particular period will be enumerated in a scroll
and transferred to the Nominated Bank through the system. The Bank will credit the drawback amount in
their respective accounts of the exporters on the next day. Bank will send a fortnightly statement to the
exporters of such credits made in their accounts.
The
facility of Payment of Drawback in the
Exporter’s Core Banking Enabled Bank Account in any Branch of any Bank
anywhere in the Country has also been introduced vide Circular No.
01/2008-Systems dated 24.06.08. It has been pointed out that when the Core
banking branches forward the statement to the exporters, the Shipping bill
details are being omitted owing to certain limitation in the banking software
employed for NEFT/RTGS due to which the exporters are facing difficulty in
correlation of the Drawback claimed and that received. The issue has already
been taken up with RBI, since these transactions are governed by guidelines
issued by the RBI in this regard from time to time.
Q4. In cases where the Rate of Drawback is not
fixed what is the procedure to claim Drawback?
A. In cases where the amount or Rate of
Drawback has not been determined, as per Rule 6 of the Drawback Rules 1995, the
exporter should apply in writing to the to the Commissioner of Central Excise
having jurisdiction over the manufacturing unit for determination of the amount
or Rate Drawback within 60 (sixty) days from the date of “Let Export Orderâ€
given by the proper officer of Customs 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
amount of Rate of Drawback determined in such cases is commonly known as “Brand
Rate of Drawbackâ€. This amount or Rate
of Drawback so determined is applicable to the specified goods exported by a
particular exporter during a particular period as mentioned in the order issued
by the Central Excise.
If the
exporter desires, the Commissioner of Central Excise may grant Drawback provisionally,
on specific application of exporter in writing, without waiting for
verification of the data furnished by the exporters and authorise
the Commissioner of Customs at the Port of Export to pay provisional amount
subject to execution of a bond with Surety or Security for a suitable amount
undertaking to refund the excess amount paid, if any.
Q5. In cases where the amount or Rate of
Drawback is already determined is found low by the exporter what is the
procedure to be followed to get the correct amount or rate fixed?
A. In cases where the amount or Rate of
Drawback is already fixed for any goods is found by the exporter that the
amount or Rate already determined is less than four-fifth (4/5) of the duties
paid on the materials or components used in the production or manufacture of
the export goods, as per Rule 7 of the Drawback Rules 1995, the exporter should
apply in writing to the Commissioner of Central Excise for determination of the
amount of Rate of Drawback within 60 (sixty) days from the date of “Let Export
Order†given by the proper officer of Customs on the relevant Shipping
Bill. The Commissioner of Central Excise
may however, 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
amount or rate of drawback determined in such cases is commonly known as
“Special brand Rate of Drawbacksâ€. This
amount or Rate or Drawback so determined is applicable to the specified goods
exported by a particular exporter during the particular period as mentioned in
the order issued by the Central Excise.
Q6. What are the precautions that the exporters
should take so that Drawback claims are not held up and are sanctioned
expeditiously?
A. It has been noticed that the exporters/CHA are
not furnishing the essential documents such as CENVAT Certificate, Self
Declaration, Leather Declaration etc. which are required to be filed for
processing of drawback claims. As a
result, queries are being raised by drawback section for want of aforesaid
documents. This leads to delay in processing the drawback claim as well as
causing hardship to the exporters. In order to avoid queries and subsequent
delay in processing and auditing Drawback claims, the exporters/CHA are advised
to ensure that all the required documents are produced at the time of
examination of the cargo.
The
rates of drawback under S.S. Nos. are dependent upon conditions mentioned
against them in the Drawback Schedule.
To enable the EDI system to process the claims correctly exporters are
advised to give the correct S.S. No. applicable to their case. If the relevant declarations are not filed
along with the Shipping Bill the system will not process the drawback claims.
The
Drawback rates under several sub-headings mentioned in the Drawback Schedule
are dependent on the condition that CENVAT facility has not been availed. In
order to claim drawback under such sub-headings, the exporters are required to
file a self-declaration known as Annexure 1 at the time of examination. The
information with regard to the Central Excise registered manufacturer exporters
or the merchant exporters who have purchased goods from the Central Excise
registered manufacturers, is obtained from the ARE-I form submitted at the time
of examination.
Please ensure that details such as Rotation No, Bank A/c
No., description, quantity, currency, value, drawback sub serial number etc.
are correctly indicated at the time of filing of S/Bills. At the time of filing
of shipping bill a check list is generated and is to be signed by the exporter/
CHA after checking correctness of all details. Therefore, responsibility of any
such errors and consequent delays lies squarely on the CHA/ exporter.
·
In case the drawback rate is dependent on % composition of
the constituent material, please ensure that the samples are drawn and sent for
test or valid previous test report is produced at the time of examination and
entered in the comments in the system by the E.O./
Superintendent.
Ask your CHA to provide you EP Copy of Shipping Bill. The
payment of drawback under the online EDI System cannot take place unless EP
Copy is generated and printed.
Please reply to the queries relating to processing
drawback claim without delay. Status of S/Bill and query can be ascertained
online through automatic email by sending e-mail to docktrack.jnch@icegate.gov.in
and mentioning the subject of the mail as exp:dbkpend:sbno:SB1,SB2,SB3 or exp:dbkpend:iec:<IEC NO> , to get status of drawback claims for particular SBs or of all drawback claims, as provided under facility notice no. 10/2008
dated 18.01.2008 or from the Service Center at JNCH.
Submit Brand Rate letters without delay.
In case drawback received is less than due, for whatsoever
reason, a supplementary claim under Rule 15 OF THE DRAWBACK Rules, 1995 is
required to be filed in the prescribed form (Appendix III) within the
prescribed time limit of 3 months.
Maximum delay of 9 months can be condoned by AC/Drawback on sufficient
cause being shown. Therefore, in case of
delay the supplementary claim should be accompanied with a request for condontion of delay and reasons for delay. It may be noted
that there is no provision to sanction the differential drawback amount on the
basis of letters/ representations, without a supplementary claim.
In case of EGM errors, non-filing of EGM, provisional
assessments, pendency of test reports, non-printing
of EP copies, amendment of the S/Bills for currency, quantity, unit, value,
etc., please contact AC(Export) of the concerned CFS from where the goods were
exported. Drawback section has no role in such matters.
In case of suspension of S/Bills owing to alert from
investigating agencies, please pursue the matter with concerned investigating
agencies and obtain NOC from them.
Q7. What is the time limit to pay Drawback by
the department when the goods are exported?
Is there any provision to pay interest when there is delay in payment of
Drawback? If so, at what rate is it paid?
A. Under Section 75A(1) of the Customs Act,
1962, where any drawback payable to a claimant is not paid within a period of one month from the date of filing a
claim, interest at the rate fixed under
section 27A is payable from the date of expiry of 1 month till the date of payment
of such Drawback. Therefore, under the EDI System, Drawback has to be paid
within one month from the date of generation of EP Copy of the Shipping Bill, which
is the deemed date of filing of the claim when the shipping bills moves online
to Drawback Queue in the EDI System for sanction.
The
rate of interest payable on delayed payments is 6 percent per annum in terms of
Notification No. 75/2003-Cus (NT) Dated
Q.8 Where an erroneous or excess payment of
‘Drawback’ and interest is paid to an exporter, how does the department,
recover it?
A Under Section 75A(2) of the Customs Act,
1962, where any drawback has been paid to the claimant erroneously or it
becomes otherwise recoverable the claimant shall, within a period of two months
from the date of demand, pay in addition to the said amount of drawback,
interest at the rate fixed under section 28AB.
Interest at rate of 13% in terms of Notification No. 76/2003-Cus (NT)
Dated
Q.9 In case of exports where the amount of
Drawback has been paid but the sale proceeds in respect of such export goods
have not been realized, what is the course of action?
A In
terms of the provisions of Section 75 (1) of the Customs Act, 1962 where any
drawback has been allowed on any goods and the sale proceeds are not received
within the time allowed under the Foreign Exchange Management Act, 1999, such
drawback shall be deemed never to have been allowed. As per the
prescribed under Rule 16A of the Drawback Rules, 1995, on receipt of relevant
information from the Reserve Bank of India, the Assistant Commissioner / Deupty Commissioner of Customs shall cause notice to be
issued to the exporter for production of evidence of realization of export
proceeds within a period of thirty days from the date of receipt of such notice
and where the exporter does not produce such evidence within the said period of
thirty days the Assistant Commissioner / Deputy Commissioner of Customs shall
pass an order to recover the amount of Drawback paid to the claimant and the
exporter shall repay the amount so demanded within thirty days of the receipt
of the said order;
Provided
that where a part of the sale proceeds has been realized, the amount of
drawback to be recovered shall bear the same proportion as the portion of the
sale proceeds not realized bears to the total amount of sale proceeds:
Where
the sale proceeds are realized by the exporter after the amount of drawback has
been recovered and the exporter produces evidence about such realization within
one year from the date of such recovery, the amount of drawback so recovered
shall be repaid.
Q.10 What is the action required on part of the
exporters for Systems Alert for
Monitoring Realization of Export Proceeds in EDI as per the Board’s circular
No. 5/2009-Cus. dated
A. Jawaharlal
Nehru Custom House has issued Public Notice No. 11 /2009 to implement the
Board’s circular No. 5/2009-Cus. dated
(a) The
exporters filing Shipping Bills (S/Bs) under drawback shall furnish a
declaration to the Assistant Commissioner/Deputy Commissioner (Drawback)
providing the details of all Authorized Dealers (AD), their codes and addresses
through whom they intend to realize the export
proceeds. Such a declaration shall be filed at each port of export through
which the exporter exports his goods. In case, there is a new addition of
AD, the same is to be intimated to the concerned Custom House at the port of
export.
(b) The system
would generate on all Drawback Shipping Bills, the due date for submission of BRCs.
(c) The
exporter shall submit a certificate from the Authorized Dealer(s) in respect of
whom declaration has been filed containing details of the shipments which
remain outstanding beyond the prescribed time limit, including the extended
time, if any, allowed by AD/RBI. Such a certificate can also be provided by a
Chartered accountant in his capacity as a statutory auditor of the exporter’s
account. A proforma for furnishing such negative
statement is enclosed as Annexure. Further, the exporters also have the
option of giving a BRC from the concerned authorized dealer(s).
(d) Such
certificates shall be furnished by the exporters on a 6 monthly basis before
the 7th day of January and July in respect of exports which have become due for
realization in the previous 6 months. For example, for the six-monthly period
of January- June 2008 (during which exports were effected), the statement/BRC
needs to be submitted by
(e) Such
certificates shall be filed by the exporter AD wise at each port. The relevant
date for filing certificates shall be the date of let export order (LEO) which
is the date when the export goods are in effect permitted to be exported.
(f) The
software shall indicate list of the shipping bills under drawback where the
BRC/negative statement has not been furnished by the exporter within the
prescribed date. The Assistant Commissioner / Deputy Commissioner
(Export) may peruse such lists either for the entire Customs port or for an
individual exporter by entering the IE code of the exporter and accordingly
initiate action to recover drawback.
(g) The system will indicate to the Assistant
Commissioner/Deputy Commissioner (Drawback) all cases of Drawback Shipping
bills with LEO date falling on or after 1.1.2008 if the BRC/negative statement
in the prescribed Annexure is not
submitted by the exporter within the prescribed period. Further, the exporters
are required to furnish the BRCs/negative statement
in the prescribed Annexure in respect of all the Drawback Shipping Bills having
LEO dates from 1.1.2004 to 31.12.2007 (separately for each six month period)
within a period of four months from the date of issue of the circular.
Q.11 What is the drawback under Section 74 of the
customs Act 1962?
A. When any goods imported on payment of
duty are re-exported, the amount of duty paid on such goods at the time of
import is refunded. Such refund is known
as Drawback under Section 74 of The Customs Act 1962.
Q.12 Is it necessary to file a separate claim for
drawback on the goods re-exported, other than by post? If so what is the time limit?
A. The exporter has to make a separate claim
in the prescribed form, within three months from the date of order permitting
clearance and loading of goods for export i.e., the date of Let Export
Orderâ€. The three months time limit may
be extended by further three months by the Assistant Commissioner of Customs,
if he is satisfied that the exporter was prevented by sufficient cause to file
his claim within three months period.
Q.13 Is the full amount of duty paid at the time
of import, refundable when such goods are re-exported? What are the other
conditions to claim Drawback under Section 74 of Customs Act 1962?
A. No.
Full amount of duty paid on importation is not refundable, when such
goods re-exported. If the goods were not
taken into use after importation, 98 percent of the amount of duty paid at the time of
import is refundable as Drawback.
However, if the goods were taken into use after importation an before
they were re-exported, Drawback is paid taking into
consideration the period of usage of such goods, depreciation in value and
other relevant circumstances. The Government fixes the rate of Drawback in such
cases by issue of notification. As per the Notification No. 23/2008-Cus Dated
Q.14 What is the procedure for claiming drawback under
Section 74 of Customs Act 1962 when the goods are re-exported other than by
post?
A. In the case of re-exports other than by
post the exporter has to file a Shipping Bill or Bill of Export in the
prescribed form with the Customs and make a declaration on such document to the
effect that –
i) The export is being made under a claim for
drawback under Section 74 of the Customs Act.
ii)
That the duties of customs were paid on the goods imported.
iii)
The goods were not taken into use after importation.
OR
The goods were taken into use.
As
per Rule 5 of the Re-Export Of Imported Goods (Drawback Of Customs Duties) Rules, 1995, a
claim for drawback under these rules shall be filed in the form at Annexure II
within three months from the date on which an order permitting clearance and
loading of goods for exportation under section 51 is made by proper officer of
customs:
Provided that the Assistant Commissioner of Customs
or Deputy Commissioner of Customs may, if he is satisfied that the exporter was
prevented by sufficient cause to file his claim within the aforesaid period of
three months, allow the exporter to file his claim within a further period of
three months.
(2) The claim shall be filed alongwith
the following documents, namely :-
(a) Triplicate copy of the Shipping Bill bearing
examination report recorded by the proper officer of the customs at the time of
export.
(b) Copy of Bill of Entry or any other prescribed
document against which goods were cleared on importation.
(c) Import invoice.
(d) Evidence of payment of duty paid at the time of
importation of the goods.
(e) Permission from Reserve Bank of
(f) Export invoice and packing list.
(g) Copy of Bill of lading or Airway bill.
(h) Any other documents as may be specified in the
deficiency memo.
(3) The date of filing of the claim for the purpose
of section 75A shall be the date of affixing the Dated Receipt Stamp on the
claims which are complete in all respects, and for which an acknowledgement
shall be issued in such form as may be prescribed by the Commissioner of
Customs.
(4) (a) Any claim which is incomplete in any
material particulars or is without the documents specified in sub-rule (2)
shall not be accepted for the purpose of section 75A and such claim shall be
returned to the claimant with the deficiency memo in the form prescribed by the
Commissioner of Customs within fifteen days of submission and shall be deemed
not to have been filed;
(b) Where exporter complies with requirements
specified in deficiency memo within thirty days from the date of receipt of
deficiency memo, the same will be treated as a claim filed under sub-rule (1).
(5) Where any order for payment of drawback is made
by the Commissioner (Appeals), Central Government or any Court against an order
of the proper officer of customs, the manufacturer exporter may file a claim in
the manner prescribed in this rule within three months from the date of receipt
of the order so passed by the Commissioner (Appeals) Central Government or the
Court, as the case may be.