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We export goods manufactured solely from inputs procured from local sources. No imported inputs are used. Can we claim duty drawback (DBK) based on All Industry Rates (AIR)?
CBEC Circular no.24/2001-Cus dated April 20, 2001, had clarified that the AIR are based on the concept of averages, wherein the drawback rate itself as well as its customs and excise portions are based on weighted averages of consumption of imported /indigenous inputs of a representative cross-section of exporters and the average incidence for duties suffered on such inputs. These rates have no relation to the actual input consumption pattern and actual incidence suffered on inputs of a particular exporter or individual consignments exported by any particular exporter under AIR/DBK Claim.
As a matter of rule, no evidence of actual duties suffered on imported or indigenous nature of inputs used, even if the AIR has customs portion, should be insisted upon by field formations. The intention of the first proviso to Rule 3 is essentially to provide a guideline to the Directorate of Drawback as to how AIR of DBK will be determined in certain situations. It is not intended for field formations to use this rule for arbitrarily altering the All Industry Rates of Drawback in the case of individual exporters for individual consignments. CBEC Circular no.19/2005-Cus dated March 21, 2005, reiterated the same. So, you can very well claim DBK at AIR even if you have used only domestic inputs to make the export product.
We are also supplying goods “as it is” to Special Economic Zones units as a trader. These goods are procured from various sources. Can we claim AIR DBK on such supply?
Rule 24(3) of the SEZ Rules, 2006 says that drawback or any other similar benefit under the Customs and Central Excise Duties Drawback Rules, 2017, as amended from time to time, against supply of goods by Domestic Tariff Area (DTA) supplier, will be admissible where payments for the supply are made from the Foreign Currency Account of the Unit. So, you can claim DBK on supply of bought-out goods to SEZ units. Of course, you must be registered with an Export Promotion Council and file a drawback bill of export.
While filing the DBK Shipping bill, our Customs Broker is asking us to sign the DBK declaration, which contains a clause that duties of Customs and Central Excise have been paid with respect to materials used in the manufacture of export goods. Is this required?
The declaration that duties of Customs and Central Excise have been paid with respect to materials used in the manufacture of export goods was mentioned at Rule 12(a)(ii) of the old Customs and Central Excise Duties Drawback Rules, 1995. Such a requirement is not there in the new Customs and Central Excise Duties Drawback Rules, 2017. So, you need not furnish the said declaration. You may suitably inform your Customs Broker.
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