Revised Duty Drawback Rates (All Industry) for 2016-17 (w.e.f. 15 Nov. 2016)

Revised Duty Drawback Rates w.e.f. 15 Nov. 2016 for 2016-17 (All Industry Rates of Duty Drawback)

A. Amendments to the Schedule of All Industry Rates of Duty Drawback w.e.f. 15 Nov. 2016

The Central Government has revised Duty Drawback Rates for 2016-17, i.e. All Industry Rates (AIRs) of Drawback, vide Notification No. 131/2016- Customs (N.T.) dated 31.10.2016 which comes into force on 15.11.2016. These AIRs take into account relevant broad average parameters including, inter alia, prevailing prices of inputs, input output norms, share of imports in input consumption, the rates of central excise and customs duties, incidence of service tax paid on taxable services which are used as input services in the manufacturing or processing of export goods, incidence of duty on HSD/ furnace oil, value of export goods, etc.  Some of the changes are highlighted below –

(a) AIRs have been provided to certain worked articles under chapters 45, 46 and 68;

(b) Certain products, earlier with all customs AIRs, have been provided composite rates. These include rubber parts (for automobile or other machinery) of chapter 40 and children’s picture, drawing/colouring books, etc. of chapter 49;

(c) Changes in certain tariff items description have been made for dispute prevention or enhancing simplification. These relate, inter-alia, to packaged rice, rubber parts, certain leather items, leggings, frocks, bicycles, protective sports gear, etc;

(d) For better product differentiation, separate tariff lines have been provided by carving out from (or replacing) certain existing tariff items. These include surimi fish paste (chapter 16), belts (chapter 39), leather woven/braided hand-bag (chapter 42), hand-bags/wallets etc of plastic and/or textile material (chapter 42), wrist bands/tie-pins/necklaces made of leather (chapter 42), fishnets/sports nets made of different materials (chapter 56/95), kurta and salwar/salwar suits/salwar-kameez/churidar-kameez, with or without dupatta (chapter 61 and 62), blankets etc of blend containing cotton and MMF (chapter 63), glass artware/handicrafts with chatons (chapter 70), tube or pipe fittings of alloy/stainless steel (chapter 73), motor cars, based on four categories of engine capacity each with sub-categories of manual or automatic transmission (chapter 87), cycle frames made of aluminum (chapter 87), soft toys (chapter 95);

(e) In the notes and conditions of the notification, the term article of leather in chapter 42 of the Drawback Schedule has been expanded to include any article wherein 60% or more of the outer and inner surface area taken together is of leather. This is in the light of newer design and commercial practices;

(f) Residuary rate (customs) provided to items across various chapters has been reduced from 1.9% to 1.5% and from 1.4% to 1.1%.

 Revised Duty Drawback Rates Schedule 2016-17 applicable w.e.f. 15 Nov. 2016

 CBEC Notification No. 131/2016 Customs (NT) dt. 31 Oct. 2016 Revised Duty Drawback Rates

 CBEC Notification No. 132/2016 Customs (NT) dt. 31 Oct. 2016 Drawback Amendment Rules 2016

 CBEC Circular No. 50/2016 dt. 31 Oct. 2016 Amendment in Duty Drawback Rates

B. Amendments to the Schedule of All Industry Rates of Duty Drawback w.e.f. 11 Feb 2016

The Government considered representations, feedback and data related to the All Industry Rates (AIR) of Duty Drawback that took effect on 23.11.2015 and has notified certain changes vide Notification No. 22/2016- Customs (N.T.) dated 08.2.2016. These changes take effect from 11.02.2016. The changes made, inter-alia, include –

(a) AIR of drawback is being provided to rice packed in PP/HDPE bags;

(b) Separate tariff entries with AIRs (including caps) are being created for “hair-on” varieties of mats/carpets and other articles under heading 4303; for yarns of cotton blended with MMF under heading 5206; fabrics of MMF blended with wool under heading 5515; jackets/blazers of cotton containing 1% or more by weight of elastane under headings 610302/610402/620302/620402; blankets of MMF under heading 6301; flat-rolled products of stainless steel of thickness of 0.25 mm or less under heading 7220; hollow drill bars and rods of non-alloy steel under heading 7228; cages under heading 8482;

(c) Sub-headings under four digit heads of 8409, 8413, 8481 and 8708 are being restructured to distinguish drawback caps for products exported;

(d) Descriptions of certain tariff items are being amended to include certain products, for example, „notebooks‟ are being included in tariff items 482006 and 482007. The tariff items 610403 and 620403 are being expanded to include „dresses, skirts, undivided skirts‟. In tariff items 741998 and 741999, „bushes‟ are being also shown to address classification issue.

(e) Drawback rates/caps are being increased for tariff items 560802 (fishing nets) and 950610 (sports nets). All footwear of headings 6401 and 6402 is being provided with composite AIRs.

(f) Drawback caps are being increased for certain existing tariff lines like 42020301 and 42020401 (leather articles); 5508 (sewing thread of MMF); 551505, 551506, 551603 and 551604 (MMF fabrics); 640301 and 640305 (leather footwear); 7310 (steel tanks, cans etc.); 8701 (tractors). Caps are being raised for certain carpets made of wool, silk, MMF and cotton of Chapter 57 and certain parts/components of Chapter 84-85. In respect of certain items of stainless/alloy steels of Chapter 72, the caps are being adjusted.

 CBEC Circular No. 06/2016-Customs dt. 9th Feb 2016

 CBEC Notification No. 22 / 2016 – CUSTOMS (N.T.) dt. 8th Feb., 2016

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