Duty Drawback Scheme

Rebate to exporters on duties paid for inputs used in export goods

Overview

The Duty Drawback scheme was introduced as a rebate to exporters on the cost incurred during the exporting process. It provides a cashback to exporters for certain raw materials and service tax used in manufacturing export goods, with specific goods eligible for duty drawbacks.

The scheme is designed to refund customs duties paid on imported products that are used or incorporated in goods meant for export. The provisions are laid under Sections 74 and 75 of the Customs Act, 1962.

Objectives

  • Refund customs duties paid on imported inputs used in export goods.
  • Encourage export competitiveness by reducing costs.
  • Support exporters with a structured rebate mechanism.

Eligibility Criteria

General Eligibility

  • Exporter must be the legal owner of the goods during export.
  • Customs duty must be paid on imported goods.
  • Duty drawback applies to most goods carrying customs duty on importation.

Documents Required

1.Import invoice
2.Proof of payment of duty during importing
3.Bill of lading copy
4.Bank-certified invoices copy
5.Invoice for export
6.Shipping bill copy
7.Bill of entry copy
8.Shipping insurance (if any)
9.Letterhead showing the drawback amount claimed
10.Quality test report / inspection report of goods

Incentives

  • Drawback rates based on time between import clearance and customs control before export:
  • Less than 3 months – 95%
  • 3 to 6 months – 85%
  • 6 to 9 months – 75%
  • 9 to 12 months – 70%
  • 12 to 15 months – 65%
  • 15 to 18 months – 60%

Our Process

1

Filing Method

Claim can be filed online via All Industry Rate (AIR) or Brand Rate methods.

2

All Industry Rate

Average rate decided by the government as a percentage of FOB value.

3

Brand Rate

For goods without an AIR, rate is determined per Drawback Rules 1995.

4

Disbursement

Claim processed via EDI system, credited directly to exporter’s bank account.

Benefits

  • Refunds duties paid on imported inputs.
  • Reduces production costs for exporters.
  • Supports global competitiveness.
  • Allows refund claims for up to three previous years if not claimed earlier.

Guidelines

  • Exported goods must differ from original imported inputs.
  • Inputs must undergo physical change during production.
  • Rate of drawback depends on manufacturing verification, raw materials, and duties paid.