GOVT.

RC COLLEGE OF COMMERCES & MANAGEMENT MFA DEPARTMENT

DUTY DRAWBACK AND SET OFF DUTIES IN CUSTOMS

Presented By PRATHIBHA.V (10ATCM 5034)
UNDER THE GUIDENCES OF PROF SATISH.H.K

Duty drawback
As per rule 2(a) of customs, Central Excise Duties and Service Tax Drawback Rules, 1995, Drawback, in relation to any goods manufactured in India and exported, Means the rebate of duty or tax, as the case may be, chargeable on any imported materials or excisable materials used or taxable service used as input services in manufactured of such goods.

Section 74 of custom act in relation to duty drawback

Section 74 deals with the drawback of customs duty paid on articles, which are imported, and subsequently re-exported. This section was basically introduced to allow the drawback of duty to the party in case the imported goods are re-exported as such, that is to say, where the imported goods were receiving as defective goods, or wrong shipment were made by the suppliers abroad or in case imported goods, after being used the country, are being sent back.

Features
 The goods must have been imported into India and

import duty must have been paid thereon.  The goods must be capable of easily identified.  98% of duty be re-paid as draw back.  Time limit for re-export.

Section 75 of customs act in relation to duty drawback

Section 75 provides for the drawback in case of imported materials used in the manufacture of goods, which are exported.

Features
 Such goods must be notified by the central

government in the official gazette.  Such goods must either be manufactured/processed, or operation on them must have been carried out in India.  No drawback in certain case.  The duty drawback will be allowed on accordance with the provision of customs, Central Excise Duties and Service Tax Drawback Rules 1995.

Circumstances in which drawbacks may be given

(1) The Commissioner may, subject to sections 70 and 71, give a drawback of an import duty paid on imported goods if the goods on which the duty was paid, or compensating products obtained from those goods, are exported from the Republic (a) without being put into home use; or (b) in any other circumstances recognized by the Customs Tariff for purposes of a drawback.

(2) If a circumstance stated in subsection (1) applies only to a part of the goods on which the import duty was paid, any drawback of that duty in terms of that subsection must be reduced proportionally.

Manner of applying for refunds or drawbacks

An application for a refund or drawback referred to in section 71 must be (a) submitted to the customs authority on a form as may be prescribed by rule. (b) accompanied by a motivation justifying the refund or drawback . (c) supported by any necessary documents and other evidence. (d) comply with such other requirements relating to the submission of applications as may be prescribed in the rules or determined in the Customs Tariff.

Types of drawback rates

 All industry drawback rates
All industry drawback rates are fixed by directorate of drawback, dept. The rates are periodically revisednormally on 1st June every year. The all industry drawback rates is fixed under rule 3 of drawback rules by considering average quantity and value of each class of input imported or manufactured in India.

 Brand rate of duty drawback

It is possible to fix all industry rate only for some standard products. It cannot be fixed for special type of products. In such cases, brand rate is fixed under rule 6.

 Special brand rate of duty drawback

All industry rate is fixed on average basis. Thus, a particular manufacturer or exporter may find that the actual excise/customs duty paid on input or input services is higher than all industry rate fixed for his product. In such case, he can apply under rule 7 of drawback rules for fixation of special brand rate, within 30 days from export.

Set-off of refunds or drawbacks against amounts owing

Where a refund or drawback is in terms of this Chapter due to a person who has failed to pay an amount of tax, duty, levy, charge, interest or administrative penalty levied or imposed under this Act or any other legislation administered by the Commissioner within the period required for payment of the amount, the Commissioner may set off the amount of such refund or drawback against the amount which that person has failed to pay. Interest on duties refunded

Thank you