Customs Duty & Drawback Services

Section 74 applies when imported goods are re-exported as-is, granting a drawback of up to 98% of customs duty paid if the goods are re-exported within two years of import (Rule 5 of the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995). Section 75 applies to exported goods that were manufactured using imported inputs; the drawback rate is fixed by the Drawback Schedule notified annually by the Ministry of Finance under Rule 3 of the Customs and Central Excise Duties Drawback Rules, 2017.

AIR is a schedule rate notified under Rule 4 of the Customs and Central Excise Duties Drawback Rules, 2017, computed as an average across exporters for a tariff heading. If the actual customs and central excise duty incidence on an exporter exceeds the AIR by more than 1%, the exporter may apply for a Brand Rate under Rule 6 or Rule 7 (special Brand Rate application within 3 months of export). Brand Rate is based on verified actual input consumption and duty paid, so it is appropriate where a manufacturer uses an unusual input mix or higher-duty imported components.

Under Section 75A of the Customs Act, 1962, drawback must be paid within one month of the date of filing of the drawback claim (i.e., the date the export general manifest is filed and the shipping bill is processed as Let Export). If payment is delayed beyond that, interest at the rate notified under Section 75A(2) accrues from the date of expiry of the one-month period. An exporter must realise foreign exchange within the period specified under FEMA 1999 (generally 9 months for goods, extendable by AD Bank); failure to realise can trigger recovery of drawback under Rule 16A of the 2017 Rules.

Yes, but with a critical restriction: under Rule 15 of the Customs and Central Excise Duties Drawback Rules, 2017, drawback cannot be claimed on the customs duty component for which RoDTEP credit has already been allowed under the Remission of Duties and Taxes on Exported Products Scheme (notified by DGFT Public Notice). In practice, the drawback schedule and RoDTEP schedule are structured to avoid double-dipping — AIR drawback today generally covers only residual customs duty not covered by RoDTEP. The shipping bill must flag both claims and the system at ICES reconciles eligibility.

The claim is filed electronically through the ICEGATE portal via the shipping bill itself, which acts as the drawback claim under EDI procedures (Customs Circular No. 33/2016 and subsequent ICEGATE SOPs). Supporting documents include the Bill of Lading or Airway Bill, commercial invoice, packing list, Bank Realisation Certificate (BRC) or FIRC for foreign exchange receipt, and for Brand Rate applications, Form DBK-I to DBK-III evidencing input consumption and duty payment. Where the drawback exceeds Rs. 50 lakh in a financial year, a CA certificate verifying the duty incidence may be required under Rule 7.