CBIC notifies the Revised All Industry Duty Drawback (DBK) Rates Schedule (2020), applicable w.e.f. 04/02/2020, vide Notification 7/2020 Customs (NT) dt. 28/01/2020, in respect of specified exports and subject to compliance with the procedural requirements/ amendments notified from time to time.
CBIC Circular 6/2020 Customs dt. 30/01/2020: Revised All Industry Rates (AIR) of Duty Drawback w.e.f. 04/02/2020
1. Government has notified the revised rates of Duty Drawback, also referred to as All Industry Rates (AIRs), vide Notification 07/2020 Customs (N.T.) dated 28/01/2020 which will come into force on 04/02/2020. The notification may be downloaded from Board’s website and carefully perused for details.
2. The salient features of the revised rates of Duty Drawback are as follows –
(i) Each tariff item in the Schedule annexed to the above mentioned Notification has been provided with an AIR specified under column (4) with cap of Duty Drawback amount given under column (5) in the Schedule. For claiming these AIRs, the relevant tariff item have to be suffixed with suffix ‘B’ e.g. for export of goods covered under tariff item (TI) 610901, the drawback serial no. should be declared as 610901B;
(ii) The notification also specifies in the Table annexed thereto, lower AIRs on export of items covered under Chapters 61 and 62 of the Schedule (viz. articles of apparel and clothing accessories) made under Special Advance Authorization Scheme (para 4.04A of Foreign Trade Policy 2015-20) in terms of Notification 45/2016 Customs dated 13/08/2016. For claiming the alternative AIR, the relevant tariff item has to be suffixed with suffix ‘D’ instead of the usual suffix ‘B’ mentioned above;
(iii) AIRs of Duty Drawback have been increased for certain items pertaining to marine products and seafood (Chapter 3, 15, 16, 23), chemicals (Chapter 29), finished and lining leather, leather articles and footwear (Chapter 41, 42 and 64), cotton and MMF textiles (Chapter 50 to 60), carpets (Chapter 57), made-ups (Chapter 63) and glass and glass ware (Chapter 70). The increase in AIRs is on account of various factors such as the changes in duties, price (CIF) of imported inputs, FOB value of export goods, import intensity of inputs etc.;
(iv) AIRs have been rationalized for bicycles tubes (Chapter 40), wool yarn/ fabrics/ readymade garments (Chapter 51 and 61-62) and silk yarn/ fabrics/ readymade garments (Chapter 50 and 61-62) among other items on account of reasons such as decrease in BCD rate, changes in price (CIF) of imported inputs, FOB value of export goods, import intensity of inputs etc.;
(v) 31 new tariff items have been introduced in the Schedule pertaining to sectors viz. chemicals (18 items), textiles and readymade garments (6 items), leather articles and footwear (6 items) and glass handicraft/ art ware (1 item). Descriptions of three tariff items in Chapters 42 viz. TIs 42020102, 42020204 and 42020302 have been revised for better product differentiation;
(vi) 10 tariff items under Chapter 64 prescribing AIR of 0.4 per cent in case of export products manufactured by units operating under Section 65 of Customs Act, 1962 have been deleted as no drawback is admissible for such goods in terms of notes and conditions given in Notification 07/2020 Customs (N.T.) dated 28/04/2020.
(vii) Appropriate caps of duty drawback amount have been provided wherever felt necessary to prescribe upper limit of duty drawback. For items under TI 8701 (Tractors), TI 8703 (Motor cars and other motor vehicles) and TI 8708 (Parts and accessory of motor vehicles of headings 8701 to 8705), caps have been removed in the Schedule.
3. Commissioners are expected to ensure due diligence to prevent any misuse. The shipping bills with parameters considered to be sensitive should be handled with adequate care at the time of export. There is also need for continued scrutiny so as to prevent any excess drawback arising from mismatch of declarations made in the Item Details and the Drawback Details in a shipping bill.
4. Close watch should also be kept by the field formations regarding any changing trend of export valuation or drawback outgo in respect of goods where caps have been removed or increased as compared to the existing caps. Any change in pattern should be immediately brought to notice of the Board. Commissioners may also inform, with appropriate data, the details of specific products where drawback cap needs to be reviewed or imposed.
CBIC Notification 7/2020 Customs (NT) dt. 28/01/2020 Revised All Industry Duty Drawback Rates Schedule applicable w.e.f. 04/02/2020
G.S.R. (E).- In exercise of the powers conferred by sub-section (2) of section 75 of the Customs Act, 1962 (52 of 1962) and sub-section (2) of section 37 of the Central Excise Act, 1944 (1 of 1944), read with rules 3 and 4 of the Customs and Central Excise Duties Drawback Rules, 2017 (hereinafter referred to as the said rules) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 95/2018 Customs (N.T.), dated 06/12/2018 published vide number G.S.R. 1180(E), dated 06/12/2018, except as respect to things done or omitted to be done before such supersession, the Central Government hereby determines the rates of drawback as specified in the Schedule given below (hereinafter referred to as the said Schedule) subject to the following notes and conditions, namely :-
Notes and conditions.-
(1) The tariff items and descriptions of goods in the said Schedule are aligned with the tariff items and descriptions of goods in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) at the four-digit level only. The descriptions of goods given at the six digit or eight digit in the said Schedule are in several cases not aligned with the descriptions of goods given in the First Schedule to the Customs Tariff Act, 1975.
(2) The general rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 shall, mutatis mutandis, apply for classifying the export goods listed in the said Schedule.
(3) Notwithstanding anything contained in the said Schedule,-
(i) all art-ware or handicraft items shall be classified under the heading of art-ware or handicraft (of constituent material) as mentioned in the relevant Chapters;
(ii) any identifiable ready to use machined part or component predominantly made of iron, steel or aluminium, made through casting or forging process, and not specifically mentioned at six digit level or more in Chapter 84 or 85 or 87, except those classifiable under heading 8432 or 8433 or 8436, may be classified under the relevant tariff item (depending upon material composition and making process) under heading 8487 or 8548 or 8708, as the case may be, irrespective of classification of such part or component at four digit level in Chapter 84 or 85 or 87 of the said Schedule;
(iii) the sports gloves mentioned below heading 4203 or 6116 or 6216 shall be classified in that heading and all other sports gloves shall be classified under heading 9506.
(4) The figures shown in column (4) in the said Schedule refer to the rate of drawback expressed as a percentage of the free on board value or the rate per unit quantity of the export goods, as the case may be.
(5) The figures shown in column (5) in the said Schedule refer to the maximum amount of drawback that can be availed of per unit specified in column (3).
(6) An export product accompanied with a tax invoice and forming part of project export (including turnkey export or supplies) for which no figure is shown in column (5) in the said Schedule, shall be so declared by the exporter and the maximum amount of drawback that can be availed under the said Schedule shall not exceed the amount calculated by applying ad-valorem rate of drawback shown in column (4) to one and half times the tax invoice value.
(7) The rates of drawback specified against the various tariff items in the said Schedule in specific terms or on ad valorem basis, unless otherwise specifically provided, are inclusive of drawback for packing materials used, if any.
(8) Drawback at the rates specified in the said Schedule shall be applicable only if the procedural requirements for claiming drawback as specified in rule 12, 13 and 14 of the said rules, unless otherwise relaxed by the competent authority, are satisfied.
(9) The rates of drawback specified in the said Schedule shall not be applicable to export of a commodity or product if such commodity or product is,-
(i) manufactured partly or wholly in a warehouse under section 65 of the Customs Act, 1962 (52 of 1962);
(ii) manufactured or exported in discharge of export obligation against an Advance Authorisation or Duty Free Import Authorisation issued under the Duty Exemption Scheme of the relevant Foreign Trade Policy:
Provided that where exports are made against Special Advance Authorisation issued under paragraph 4.04A of the Foreign Trade Policy 2015-20 in discharge of export obligations in terms of Notification No. 45/2016-Customs, dated 13/08/2016, the rates of drawback specified in the said Schedule shall apply as if in the said Schedule, the entries in columns (4) and (5) against the Tariff items in the said Schedule below all Chapters, except Chapter 61 and 62, are NIL, and those in Chapters 61 and 62 are as specified in the Table given below;
(iii) manufactured or exported by a unit licensed as hundred per cent Export Oriented Unit in terms of the provisions of the relevant Foreign Trade Policy;
(iv) manufactured or exported by any of the units situated in Free Trade Zones or Export Processing Zones or Special Economic Zones;
(v) manufactured or exported availing the benefit of the notification No. 32/1997 Customs, dated 01/04/1997.
(10) Whenever a composite article is exported for which any specific rate has not been provided in the said Schedule, the rates of drawback applicable to various constituent materials can be extended to the composite article according to net content of such materials on the basis of a self declaration to be furnished by the exporter to this effect and in case of doubt or where there is any information contrary to the declarations, the proper officer of customs shall cause a verification of such declarations.
(11) The term “articles of leather” in Chapter 42 of the said Schedule shall mean any article wherein (a) 60% or more of the outer visible surface area or (b) 60% or more of the outer and inner surface area taken together, excluding shoulder straps or handles or fur skin trimming, if any, is of leather notwithstanding that such article is made of leather and any other material.
(12) The term “dyed”, wherever used in the said Schedule in relation to textile materials, shall include yarn or piece dyed or predominantly printed or coloured in the body.
(13) The term “dyed” in relation to fabrics and yarn of cotton, shall include “bleached or mercerised or printed or melange”.
(14) The term “dyed” in relation to textile materials in Chapters 54 and 55 shall include “printed or bleached or melange”.
(15) In respect of the tariff items in Chapters 60, 61, 62 and 63 of the said Schedule, the blend containing cotton and man-made fiber shall mean that content of man-made fibre in it shall be more than 15% but less than 85% by weight and the blend containing wool and man-made fiber shall mean that content of man-made fibre in it shall be more than 15% but less than 85% by weight. The garment or made-up of cotton or wool or man-made fiber or silk shall mean that the content in it of the respective fiber is 85% or more by weight.
(16) The term “shirts” in relation to Chapters 61 and 62 of the said Schedule shall include “shirts with hood”.
(17) In respect of the tariff items appearing in Chapter 64 of the said Schedule, leather shoes, boots or half boots for adult shall comprise the following sizes, namely : –
(i) French point or Paris point or Continental Size above 33;
(ii) English or UK adult size 1 and above; and
(ii) American or USA adult size 1 and above.
(18) In respect of the tariff items appearing in Chapter 64 of the said Schedule, leather shoes, boots or half boots for children shall comprise the following sizes, namely :-
(i) French point or Paris point or Continental Size upto 33;
(ii) English or UK children size upto 13; and
(iii) American or USA children size upto 13.
(19) The drawback rates specified in the said Schedule against tariff items 711301, 711302 and 711401 shall apply only to goods exported by airfreight, post parcel or authorised courier through the Custom Houses as specified in para 4.71 of the Hand Book of Procedures, 2015-2020 published vide Public Notice No. 1/2015-2020, dated 01/04/2015 of the Government of India in the Ministry of Commerce and Industry, after examination by the Customs Appraiser or Superintendent to ascertain the quality of gold or silver and the quantity of net content of gold or silver in the gold jewellery or silver jewellery or silver articles. The free on board value of any consignment through authorised courier shall not exceed rupees twenty lakhs.
(20) The drawback rates specified in the said Schedule against tariff items 711301, 711302 and 711401 shall not be applicable to goods manufactured or exported in discharge of export obligation against any Scheme of the relevant Foreign Trade Policy of the Government of India which provides for duty free import or replenishment or procurement from local sources of gold or silver.
(21) “Vehicles” of Chapter 87 of the said Schedule shall comprise completely built unit or completely knocked down (CKD) unit or semi knocked down (SKD) unit.
2. All claims for duty drawback at the rates of drawback notified herein shall be filed with reference to the tariff items and descriptions of goods shown in columns (1) and (2) of the said Schedule respectively. Where, in respect of the export product, the rate of drawback specified in the said Schedule is Nil or is not applicable, the rate of drawback may be fixed, on an application by an individual manufacturer or exporter in accordance with the said rules. Where the claim for duty drawback is filed with reference to tariff item of the said Schedule and it is for the rate of drawback specified herein, an application, as referred under sub-rule (1) of rule 7 of the said rules shall not be admissible.
3. The amount referred in sub-rule (3) of rule 7 of the said rules, relating to provisional drawback amount as may be specified by the Central Government, shall be equivalent to the drawback rate and drawback cap shown in column (4) and (5) in the said Schedule for the tariff item corresponding to the export goods, if applicable, and determined as if it were a claim for duty drawback filed with reference to such rate and cap.
4. This notification shall come into force on 04/02/2020. (contd… please refer above attachment for revised dbk schedule 2020)
CBIC Circular 24/2019 Customs dt. 08/08/2019: Clarification on Applicability of Duty Drawback Rates while fixing Brand Rate under GST
CBIC Circular 05/2019 Customs dt. 20/02/2019: Amendments in All Industry Rates of Duty Drawback w.e.f. 20/02/2019
CBIC Notification 95/2018 Customs (NT) dt. 06/12/2018: Revised All Industry Duty Drawback Rates Schedule applicable w.e.f. 19/12/2018
CBIC Circular No. 52/2018 Customs dt. 12/12/2018
CBEC Notification 88/2017 Customs (NT) dt. 21/09/2017: Customs and Central Excise Duties Drawback Rules, 2017