04 November 2016

New All Industry Rates of Drawback notified

Central Board of Excise and Customs (CBEC) has notified new All Industry Rates (AIR) of Duty Drawback which are effective from 23-11-2015, i.e. will be applicable on exports made from 23rd of November 2015. Further, Customs, Central Excise and Service Tax Drawback Rules, 1995 have been amended by Notification dated 16-11-2015 to specify an amount for payment as provisional drawback by proper officer of Customs. Circular No. 29/2015-Cus., dated 16-11-2015 has also been issued in this regard to explain the changes.


Changes in AIR

According to Notification No. 110/2015-Cus. (N.T.), dated 16-11-2015 containing the new schedule, while composite rates of drawback have been increased in the case of specified goods covered under Chapters 3, 16, 33, 41, 42, 54, 55, 61, 62, 63 and 82, separate entries have been created in respect of several goods in the Drawback schedule.

Composite rates have been provided for certain products like bicycle tyres & tubes, woven fabrics of other vegetable textile fibres/ woven fabrics of paper yarn, headgear, umbrellas/walking sticks, artificial flowers and acrylic blankets. These products presently have only customs rates.

Further, while Customs rate has been increased for certain goods of iron & steel, tools and parts of base metal and certain machinery, composite rates for wooden art ware, papier mache, yarn/ fabric/ garment of silk, certain MMF yarn/ fabric, carpets, brass artware/ articles and certain sports goods have been reduced.


Brand rate – Provisional payment of drawback

Rule 7 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 has been amended with effect from 23-11-2015 by Notification No. 109/2015-Cus. (N.T.) to provide for payment of provisional drawback amount by the proper officer of Customs. Presently, an application in this regard is required to be filed to the Commissioner of Central Excise or the Commissioner of Customs and Central Excise. Option relating to filing of application has however also been retained to provide a facility of further provisional drawback (in excess of the amount paid by proper officer).

It may be noted that Notification No. 110/2015-Cus. (N.T.) specifies this amount as equivalent to the Customs component of AIR corresponding to the export goods. CBEC Circular also states that the amount paid as provisional drawback under the above dispensation shall be taken into account by the Central Excise to authorize further provisional drawback.


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