Revised Duty Drawback rates notified

The Government has announced the revised All Industry Rates (AIR) of Duty Drawback 2011-12 vide Notification No. 68 / 2011- Cus (N.T.) dated 22.09.2011.  The rates of duty drawback are effective from 01.10.2011.

The drawback rates have been determined on the basis of certain broad parameters including, inter alia, the prevailing prices of inputs, Standard Input Output Norms (SION), share of imports in the total consumption of inputs, FOB value of export goods and the applied rates of duty.  The incidence of duty on HSD/Furnace Oil has been factored in the drawback calculations.  The incidence of service tax paid on taxable services which are used as input services in the manufacturing or processing of export goods has also been factored. 

The drawback schedule this year incorporates items which were hitherto under the DEPB scheme.  Thus, the total number of items in the drawback schedule now number approximately 4000.  While incorporating these DEPB items in the Drawback schedule, care has been taken to classify them at the appropriate four digit level.

For easy reference, a list of all the DEPB items falling under a particular product code and serial number with the corresponding drawback tariff item has also been separately hosted on the CBEC website.

Broadly most of the items which are already covered under the duty drawback schedule will suffer a minor reduction in the existing drawback rates mainly on account of the reduction in basic customs duty on crude petroleum as well as a reduction in central excise duty on diesel.

As a general policy, it has been decided that there will be no value cap on items in the drawback schedule, where the composite duty drawback rate is less than or equal to 3%. Further, there are certain goods especially in engineering and chemicals sectors where because of the wide variation in prices, no value cap has been assigned. You may like to exercise due diligence to prevent any misuse consequently. At the same time, it may also be ensured that the process of scrutiny of such items does not result in hardship to the exporters and the export consignments are not held up.

Source: www.taxindiaonline.com and www.cbec.gov.in