DRAWBACK

 

What is “All Industry Rate of Drawback” ?
In cases where the Rate of Drawback is not fixed what is the procedure to claim Drawback?
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?
What is the time limit to make a claim for payment of Drawback in cases where exporter applied to the Central Government for the determination of the rate of Drawback, if not determined already or the rate already determined is found low?
What is the procedure for claiming Drawback on the goods exported by post?
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?
What is the procedure for claiming ‘Drawback’ when the goods are exported other than by post?
Is it necessary to file a separate claim for ‘Drawback’ on the goods exported other than by post? If so, what is the time limit and what are the documents to be enclosed to the claim?
Is there any provision to pay interest on the delayed payments of Drawback?  If so what is the rate of interest?
Where any order for payment of Drawback is made by the Commissioner (Appeals), Central Govt. or any Court, on an appeal against an order of the Customs officer, is it necessary to file a separate claim for Drawback?  If so, what is the time limit?
Where an erroneous or excess payment of ‘Drawback’ and interest is paid to an exporter, how does the department, recover it?
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?
What is the procedure for claiming drawback under the EDI system?
What is the drawback under Section 74 of the customs Act 1962?  
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?
What is the procedure for claiming Drawback on the goods re-exported by post?
What is the time limit to pay Draw back by the department, when the goods are re-exported by post?  Is there any provision to pay interest on delayed payment of drawback?  If, so at what rate is it paid?
What is the procedure for claiming drawback when the goods are re-exported other than by post?
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 and what are the documents to be enclosed to the Claim?

 

Q.1          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.

 

 

 

 

 

Q.2          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, the exporter may export the goods under claim for Drawback provisionally by filing Drawback Shipping Bill, provided Customs/Central Excise duties were paid on inputs of the export goods and no benefits were availed for towards duties so paid.  The exporter should apply in writing to the Central Government for determination of the amount or Rate 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 Central Government have 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 of Rate of Drawback determined in such cases is commonly known as “Brand Rate of Drawback”.  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 Government.

 

If the exporter desires, the Central Government may grant Drawback provisionally on specific application I 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.

 

 

 

 

 

Q.3          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.   The exporter should apply in writing to the Central Government 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 thee relevant Shipping Bill.  The central government 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 Drawbacks”.  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 government.

 

 

 

 

 

 

Q4.          What is the time limit to make a claim for payment of Drawback in cases where exporter applied to the Central Government for the determination of the rate of Drawback, if not determined already or the rate already determined is found low?

 

A.            Where an application has been made by the manufacturer or exporter for determination of rate of Drawback the claim for payment of Drawback should be made within three months from the date of receipt of communication from the Government of India regarding determination of Drawback.

 

 

 

 

Q5.          What is the procedure for claiming Drawback on the goods exported by post?

 

A.            When the goods are exported by Post under claim fro Drawback the outer packing of the parcel containing the goods should carry among other things the address of the consignee and also carry in bold letters “DRAWBACK EXPORT”.  The exporter should deliver such parcel to the competent postal authority along with a claim for Drawback in the prescribed form duly filled in, in quadruplicate.  The postal authorities present the parcel package to the customs.  The customs authorities after due examination of the goods permit onward dispatch of the parcel/package to the foreign destination.  The postal authorities forward the claim form received from the exporter to the proper officer of customs for processing and paying the amount of Drawback due to the exporter.

 

 

 

 

 

Q.6          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?

 

A.            The Drawback has to be paid within three months from the date of filing of the claim for payment of such Drawback.  In the case of exports by post, the three months time limit computed from the date of receipt of the claim by the proper officer of Customs from the postal authorities.  In case the claim form is incomplete the exporters are informed by the customs of the deficiency memo within 15 days of receipt of the claim from the postal authorities.  The exporters have to comply with the requirements specified in deficiency within 30 days of its receipt and submit to Customs and obtain acknowledgement.  The three months time limit is computed from the date of such acknowledgement.

 

If the Drawback is not paid within three months computed, as discussed above, interest is payable from the date of expiry of three months till the date of payment of such Drawback.

 

The rate of interest payable on delayed payments is 15 percent per annum.  (Section 75A of the Customs Act, 1962 read with Notification No.32/95-NT(Cus); dated 26.05.1995.)

 

 

 

 

 

Q.7          What is the procedure for claiming ‘Drawback’ when the goods are exported other than by post?

 

A.            In the case of 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)                   A claim for Drawback under Drawback rules is being made,

(ii)                 The duties of Customs and Central Excise have been paid  in respect of containers, packing materials and materials used in the manufacture of the export goods on which ‘Drawback’ is being claimed and that in respect of such containers or materials no separate claim for rebate of duty under the Central Excise Rules, 1944 has been or will be made to the Central Excise authorities; and-

(iii)                Furnish a copy of shipment invoice or any other document giving particulars of description, quantity and value of the goods to be exported.

 

Where the amount or rate of drawback as been determine under Rule 6 of Rule 7 of the Drawback Rules 1995, the following additional declaration has to be made –

 

a)                   There is no change in the manufacturing formula and in the quantum per unit of the imported materials or components, if any, utilized in the manufacture of export goods, and

b)                   The materials or components, which have been stated in the application under Rule 6 or Rule 7 to be imported, continue to be so imported and are being obtained from indigenous source.

 

 

 

 

Q.8          Is it necessary to file a separate claim for ‘Drawback’ on the goods exported other than by post? If so, what is the time limit and what are the documents to be enclosed to the claim?

 

A.            A.  Only in the manual system of filing the Shipping Bills the exporter has to make a separate claim in the prescribed from within three months from the date of making an order permitting clearance and loading of goods i.e., the date of ‘Let Export Order’.  The three months time limit may be extended by another three months, by the Assistant Commissioner / Deupty Commissioner of Customs and a further period of nine months by the Commissioner of Customs on being satisfied that the exporter was prevented by sufficient cause from filing his claim within the period of three months.

 

The documents to be enclosed to the Drawback claim are –

 

(i)                   Pre-receipt for Drawback claim in the form prescribed by the Commissioner of Customs

(ii)                 Triplicate copy of the Shipping Bill

(iii)                Copy of the Bank certified Invoice;

(iv)               Copy of the packing list;

(v)                 Copy of Bill of Lading/Airway Bill;

(vi)                Copy of AR-4 form, whenever applicable

(vii)              Insurance certificate where necessary

(viii)            Copy of test report where the goods have been subjected to test.

(ix)                Copy of communication regarding rate of drawback where the drawback claims for a rate determined by the Central Government under Rule 6 or Rule 7 of the Drawback Rules.

(x)                  Declaration to be filed by the exporter under drawback rules

(xi)                The proper officer may specify any other documents as required .

 

 

 

 

 

Q.9          Is there any provision to pay interest on the delayed payments of Drawback?  If so what is the rate of interest?

 

A             Yes.  There is a provision to pay interest, if the amount of Drawback is not paid within a periods of three months from the date of filing a claim by the exporter, for the period from the date of expiry of three months till the payment of drawback.

 

The three months time limit has to be computed from the date of affixing the date receipt stamp by the customs on the claims, which are complete in all respects, for which an acknowledgement is issued by the Customs.

 

In case the claim is incomplete, the same shall be returned to the claimant with a deficiency memo in the prescribed form within 15 days of submission of the claim. The exporter has to comply with the requirements specified in the deficiency memo within 30 days from the date of receipt of deficiency memo and the date of receipt of such completed claim is taken to compute the thee months time limit.

 

The rate of interest payable on delayed payment of Drawback is 15 % per annum (Section 75A of the Customs Act 1962 read with Notification no 32/95 NT (Cus) dated 26.5.96)

 

 

 

 

Q.10.       Where any order for payment of Drawback is made by the Commissioner (Appeals), Central Govt. or any Court, on an appeal against an order of the Customs officer, is it necessary to file a separate claim for Drawback?  If so, what is the time limit?

 

A             Yes.  The exporter may file a claim with the proper officer of customs within three months from the date of receipt of the order so passed by the Commissioner (Appeals), Central Govt., or Court as the case may be.

 

 

 

 

Q.11        Where an erroneous or excess payment of ‘Drawback’ and interest is paid to an exporter, how does the department, recover it?

 

A             Where an erroneous or excess payment of ‘Drawback’ and interest has been paid the proper officer of customs issues a demand notice for recovery of such erroneous or excess payment.  The claimant has to pay back such excess amount within three months from the date of receipt of the demand notice.  If the amount is not paid within three months, interest is payable from the date of expiry of three months till the amount is recovered by the department.

 

 

 

 

Q.12        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 case of where the amount of Drawback has been paid but the sale proceeds in respect of such export goods have not been realized the Department initiates action to recover the amount of Drawback paid.  The following procedure is prescribed to affect such recovery.

 

1)             Where an amount of drawback has been paid to an exporter or a person authorized by him (hereinafter referred to as the claimant) but the sale proceeds in respect of such export goods have not been realized by or on behalf of the exporter in India within the period allowed under the Foreign Exchange Regulation Act, 1973, (46 of 1973) including any extension of such period, such drawbacks shall be recovered in the manner specified below.

 

2)             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 sixty 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 be the amount equal to that portion of the amount of drawback paid which bears the same proportion as the portion of the sale proceeds not realized bears to the total amount of sale proceeds:

 

3)             Where the exporter fails to repay the amount under sub-rule (2) within the said period of sixty days referred to in sub-rule(2), it shall be recovered in the manner laid down in rule 16.

 

4)                    Where the sale proceeds are realized by the exporter after the amount of drawback has been recovered from him under sub-rule (2) or sub rule (3) and the export produces evidence about such realization within one year from the date of such recovery of the amount of drawback, the amount of drawback so recovered shall be repaid by the Assistant Commissioner / Deputy Commissioner to the claimant

 

 

 

 

 

 

Q. 13.      What is the procedure for claiming drawback under the EDI system? 

 

A.            Under the EDI system there is no need for filing separate drawback claims.  In the EDI system the exporter are required to open their accounts with the Bank nominated by the Custom Houses.  This has to be done to enable direct credit of drawback amount to their accounts, obviating the need for issue of cheques.

 

For export of goods under claim for drawback, the exporters will file S.D.F declaration in Annexure B in lieu of GR –1 FORM. The declaration in Annexure C would also be filed when the export goods are presented at the Export shed for examination and Let export.  In addition they should file a declaration if any in the appendices applicable to the goods mentioned in the Public Notices issued by the Customs Houses for processing Shipping Bills under the EDI system.

 

    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 Sl.No. of relevant appendix 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 exporters are therefore advised to file the declaration along with the Shipping Bills.

 

    After actual export of the goods. The drawback claims will be processed through the system on first come first served basis.  The status of Shipping Bills and sanction of drawback claim can be ascertained from the query counter set up at the Service centre.  If any query has been raised or deficiency noticed, the same will be shown on the terminal provided there.  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 Que. 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 claim

 

   All the claims sanctioned on a particular day 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 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.

 

 

 

 

 

 

 

Q.14        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.15        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 where 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.

 

 

 

 

Q.16        What is the procedure for claiming Drawback on the goods re-exported by post?

 

A.            Where the goods are to be re-exported by post under a claim for drawback the outer package of the parcel containing the goods should carry among other things the address of the Consignee and also carry in bold letter “drawback export”.  The exporter should deliver such parcel to the competent postal authority along with a claim for drawback n the prescribed form duly filled, in, quadruplicate.  The postal authorities preset the parcel/package to the customs authorities for examination.  The customs authorities after due examination of the goods permit onward despatch of the parcel/package to the foreign destination.  The postal authorities forward the claim form received from the exporter to the proper officer of customs for processing and paying the amount of drawback due to the exporter.

 

 

 

 

 

Q.17        What is the time limit to pay Draw back by the department, when the goods are re-exported by post?  Is there any provision to pay interest on delayed payment of drawback?  If, so at what rate is it paid?

 

A.      The drawback has to be paid within three months from the date of filing claim for payment of such drawback.

 

In case   of export by post the three months time limit is computed from the date of receipt of the claim by the proper officer of customs from the postal authorities.  In case, the claim from is incomplete, the exporters are informed by the customs of the deficiency within fifteen days of receipt of the claim from the postal authorities.  The exporters have to comply with the requirements specified within 30 days of the receipt of the deficiency memo and obtain an acknowledgement.  The three months time limit is computed from the date of such acknowledgement.

 

If the drawback is not paid within three months computed as discussed above interest is payable from the date of expiry of three months till the date of payment of such drawback.  The rate of interest payable on delayed payment of drawback is 15 per cent per annum. (Section 75A of the Customs Act, 1962 read with NotificationnNo.32/95 Nt. (Cus) dated 26.5.95)

 

 

 

 

 

Q.18        What is the procedure for claiming drawback 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.

 

The exporter should also furnish to the customs a copy of the Bill of Entry or any other prescribed document against which the goods were cleared on impo9rtaition, import invoice, documentary evidence of payment of duty, export invoice, packing list and permission from the Reserve bank of India to re-export the goods, wherever necessary.

 

 

 

 

 

Q.19        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 and what are the documents to be enclosed to the Claim?

 

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 Order”.   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.  The exporter has to enclose the following documents to the drawback claim.

a)                   Triplicate copy of the Shipping Bill bearing examination report recorded by the proper officer of 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 at the time of importation o goods.

e)                   Permission from the Reserve bank of India for re-export of goods, wherever necessary.

f)                    Export invoice and packing list.

g)                   Copy of Bill of Lading or Airway Bill

h)                   Any other documents that may be called for by the proper officer of customs.

 

 

 

 

Q.8          Is it necessary to file a separate claim for ‘Drawback’ on the goods exported other than by post? If so, what is the time limit and what are the documents to be enclosed to the claim?

 

A.            A.  Only in the manual system of filing the Shipping Bills the exporter has to make a separate claim in the prescribed from within three months from the date of making an order permitting clearance and loading of goods i.e., the date of ‘Let Export Order’.  The three months time limit may be extended by another three months, by the Assistant Commissioner / Deupty Commissioner of Customs and a further period of nine months by the Commissioner of Customs on being satisfied that the exporter was prevented by sufficient cause from filing his claim within the period of three months.

 

The documents to be enclosed to the Drawback claim are –

 

(i)                   Pre-receipt for Drawback claim in the form prescribed by the Commissioner of Customs

(ii)                 Triplicate copy of the Shipping Bill

(iii)                Copy of the Bank certified Invoice;

(iv)               Copy of the packing list;

(v)                 Copy of Bill of Lading/Airway Bill;

(vi)                Copy of AR-4 form, whenever applicable

(vii)              Insurance certificate where necessary

(viii)            Copy of test report where the goods have been subjected to test.

(ix)                Copy of communication regarding rate of drawback where the drawback claims for a rate determined by the Central Government under Rule 6 or Rule 7 of the Drawback Rules.

(x)                  Declaration to be filed by the exporter under drawback rules

(xi)                The proper officer may specify any other documents as required .

 

 

 

 

 

Q.9          Is there any provision to pay interest on the delayed payments of Drawback?  If so what is the rate of interest?

 

A             Yes.  There is a provision to pay interest, if the amount of Drawback is not paid within a periods of three months from the date of filing a claim by the exporter, for the period from the date of expiry of three months till the payment of drawback.

 

The three months time limit has to be computed from the date of affixing the date receipt stamp by the customs on the claims, which are complete in all respects, for which an acknowledgement is issued by the Customs.

 

In case the claim is incomplete, the same shall be returned to the claimant with a deficiency memo in the prescribed form within 15 days of submission of the claim. The exporter has to comply with the requirements specified in the deficiency memo within 30 days from the date of receipt of deficiency memo and the date of receipt of such completed claim is taken to compute the thee months time limit.

 

The rate of interest payable on delayed payment of Drawback is 15 % per annum (Section 75A of the Customs Act 1962 read with Notification no 32/95 NT (Cus) dated 26.5.96)

 

 

 

 

Q.10.       Where any order for payment of Drawback is made by the Commissioner (Appeals), Central Govt. or any Court, on an appeal against an order of the Customs officer, is it necessary to file a separate claim for Drawback?  If so, what is the time limit?

 

A             Yes.  The exporter may file a claim with the proper officer of customs within three months from the date of receipt of the order so passed by the Commissioner (Appeals), Central Govt., or Court as the case may be.

 

 

 

 

Q.11        Where an erroneous or excess payment of ‘Drawback’ and interest is paid to an exporter, how does the department, recover it?

 

A             Where an erroneous or excess payment of ‘Drawback’ and interest has been paid the proper officer of customs issues a demand notice for recovery of such erroneous or excess payment.  The claimant has to pay back such excess amount within three months from the date of receipt of the demand notice.  If the amount is not paid within three months, interest is payable from the date of expiry of three months till the amount is recovered by the department.

 

 

 

 

Q.12        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 case of where the amount of Drawback has been paid but the sale proceeds in respect of such export goods have not been realized the Department initiates action to recover the amount of Drawback paid.  The following procedure is prescribed to affect such recovery.

 

1)             Where an amount of drawback has been paid to an exporter or a person authorized by him (hereinafter referred to as the claimant) but the sale proceeds in respect of such export goods have not been realized by or on behalf of the exporter in India within the period allowed under the Foreign Exchange Regulation Act, 1973, (46 of 1973) including any extension of such period, such drawbacks shall be recovered in the manner specified below.

 

2)             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 sixty 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 be the amount equal to that portion of the amount of drawback paid which bears the same proportion as the portion of the sale proceeds not realized bears to the total amount of sale proceeds:

 

3)             Where the exporter fails to repay the amount under sub-rule (2) within the said period of sixty days referred to in sub-rule(2), it shall be recovered in the manner laid down in rule 16.

 

4)                    Where the sale proceeds are realized by the exporter after the amount of drawback has been recovered from him under sub-rule (2) or sub rule (3) and the export produces evidence about such realization within one year from the date of such recovery of the amount of drawback, the amount of drawback so recovered shall be repaid by the Assistant Commissioner / Deputy Commissioner to the claimant

 

 

 

 

 

 

Q. 13.      What is the procedure for claiming drawback under the EDI system? 

 

A.            Under the EDI system there is no need for filing separate drawback claims.  In the EDI system the exporter are required to open their accounts with the Bank nominated by the Custom Houses.  This has to be done to enable direct credit of drawback amount to their accounts, obviating the need for issue of cheques.

 

For export of goods under claim for drawback, the exporters will file S.D.F declaration in Annexure B in lieu of GR –1 FORM. The declaration in Annexure C would also be filed when the export goods are presented at the Export shed for examination and Let export.  In addition they should file a declaration if any in the appendices applicable to the goods mentioned in the Public Notices issued by the Customs Houses for processing Shipping Bills under the EDI system.

 

    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 Sl.No. of relevant appendix 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 exporters are therefore advised to file the declaration along with the Shipping Bills.

 

    After actual export of the goods. The drawback claims will be processed through the system on first come first served basis.  The status of Shipping Bills and sanction of drawback claim can be ascertained from the query counter set up at the Service centre.  If any query has been raised or deficiency noticed, the same will be shown on the terminal provided there.  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 Que. 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 claim

 

   All the claims sanctioned on a particular day 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 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.

 

 

 

 

 

 

 

Q.14        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.15        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 where 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.

 

 

 

 

Q.16        What is the procedure for claiming Drawback on the goods re-exported by post?

 

A.            Where the goods are to be re-exported by post under a claim for drawback the outer package of the parcel containing the goods should carry among other things the address of the Consignee and also carry in bold letter “drawback export”.  The exporter should deliver such parcel to the competent postal authority along with a claim for drawback n the prescribed form duly filled, in, quadruplicate.  The postal authorities preset the parcel/package to the customs authorities for examination.  The customs authorities after due examination of the goods permit onward despatch of the parcel/package to the foreign destination.  The postal authorities forward the claim form received from the exporter to the proper officer of customs for processing and paying the amount of drawback due to the exporter.

 

 

 

 

 

Q.17        What is the time limit to pay Draw back by the department, when the goods are re-exported by post?  Is there any provision to pay interest on delayed payment of drawback?  If, so at what rate is it paid?

 

A.      The drawback has to be paid within three months from the date of filing claim for payment of such drawback.

 

In case   of export by post the three months time limit is computed from the date of receipt of the claim by the proper officer of customs from the postal authorities.  In case, the claim from is incomplete, the exporters are informed by the customs of the deficiency within fifteen days of receipt of the claim from the postal authorities.  The exporters have to comply with the requirements specified within 30 days of the receipt of the deficiency memo and obtain an acknowledgement.  The three months time limit is computed from the date of such acknowledgement.

 

If the drawback is not paid within three months computed as discussed above interest is payable from the date of expiry of three months till the date of payment of such drawback.  The rate of interest payable on delayed payment of drawback is 15 per cent per annum. (Section 75A of the Customs Act, 1962 read with NotificationnNo.32/95 Nt. (Cus) dated 26.5.95)

 

 

 

 

 

Q.18        What is the procedure for claiming drawback 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.

 

The exporter should also furnish to the customs a copy of the Bill of Entry or any other prescribed document against which the goods were cleared on impo9rtaition, import invoice, documentary evidence of payment of duty, export invoice, packing list and permission from the Reserve bank of India to re-export the goods, wherever necessary.

 

 

 

 

 

Q.19        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 and what are the documents to be enclosed to the Claim?

 

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 Order”.   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.  The exporter has to enclose the following documents to the drawback claim.

a)                   Triplicate copy of the Shipping Bill bearing examination report recorded by the proper officer of 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 at the time of importation o goods.

e)                   Permission from the Reserve bank of India for re-export of goods, wherever necessary.

f)                    Export invoice and packing list.

g)                   Copy of Bill of Lading or Airway Bill

h)                   Any other documents that may be called for by the proper officer of customs.