Indian Income Tax
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Duty Drawback On Goods Exported

The claim for drawback is processed under the following systems:

  1. Manual System
  2. EDI System
  3. By Post
  1. Procedure For Claiming Drawback Under Section 75 Of The Customs Act Under The Manual System:

    For the purpose of claiming drawback, the exporter is required to file a drawback-shipping bill in the prescribed Format as required under Rule 13 along with the necessary declaration. The goods after assessment are examined by the officers posted in the Examination Shed as required for each individual case. The examination report will indicate the nature of goods in terms of drawback schedule for classification and application of correct rate. Samples may have to be drawn for testing by lab in respect of chemicals, synthetic fabrics’ etc as specified from time to time to confirm the declarations in the export documents. The triplicate Copy if the drawback shipping bill which contain the examination report is the claim copy

    Supporting Documents Required For Processing The Claim.

    1. Triplicate of the Shipping Bill
    2. Copy of the Bank Certified Invoices.
    3. Copy of the Bill Lading / Airway Bill
    4. Sixtuplicate Copy of AR-4 wherever applicable
    5. Freight and Insurance certificate wherever the contract is CIF / C&F
    6. Copy of the Test report where the goods are required to be tested
    7. Copy of the Brand rate letters where the drawback claim is against the Brand rate
    8. Mate receipt
    9. Copy of the Contract or Letter of credit as the case may be
    10. Modvat Declaration wherever applicable
    11. Any declaration required as per foot note of the Drawback schedule
    12. Work sheet showing the drawback amount claimed
    13. DEEC Book and license copy where applicable.
    14. Transshipment certificate where applicable
    15. Proof of foreign agency commission paid if any
    16. Blank acknowledgement card in duplicate
    17. Pre - receipt for drawback amount on the reverse of Shipping Bill duly signed on the Rs1/- revenue stamp

    The claims are settled and passed by the appraiser if the amount sanctioned is below Rs 1,00,000/- and by the Assistant Commissioner, if the amount of drawback exceeds Rs1.00.000/-. After pre-audit, the cheques are issued to the designated banks for credit to the exporters account or handed over to the authorized representative of the exporter. For further details refer to the Public Notices issued by the concerned Custom Houses/ Central Excise Commissionerate.

  2. Processing Of Drawback Claims Under Section 75 Of The Customs Act Under The EDI Syatem
    • Computerized processing of shipping bills is in vogue at over 19 ports in India. The shipping bills are processed under the Indian Customs EDI systems (ICES).
    • Under the system, there would be no processing of paper documents except statutory declarations and endorsements until ‘let export’ order stage. Till such time exporters / CHAs are given access to file documents through the Service centre set up in the Custom Houses / Air Cargo complexes.
    • Processing of drawback claims under the system will be applicable for all exports except in respect of the claims under Section 74 of the Customs Act and those relating to EPZ/100% EOU.
    • For the excluded categories the export Shipping Bills will be filed manually and processed by AC Drawback, as hitherto. Under the EDI system there is no need for filing separate drawback claims. The shipping bill itself treated as drawback claim.
    • In the EDI system the exporters are required to open their accounts with the Bank nominated by the Custom Houses/ ACC. This has to be done to enable direct credit of drawback amount to their accounts, obviating the need for issue of cheques.
    • For export of goods under claim for drawback, the exporters will file S.D.F declaration in Annexure B in lieu of GR –1 FORM. The declaration in Annexure C would also be filed when the export goods are presented at the Export shed for examination and Let export. In addition they should file a declaration if any in the appendices applicable to the goods mentioned in the Public Notices issued by the Customs Houses / ACC for processing Shipping Bills under the EDI system.
    • The rates of drawback under S.S Nos. are dependent upon conditions mentioned against them in the Drawback Schedule. To enable the EDI system to process the claims correctly exporters are advised to give the correct Sl.No. of relevant appendix applicable to their case. If the relevant declarations are not filed along with the Shipping Bill the system will not process the drawback claims. The exporters are therefore advised to file the declaration along with the Shipping Bills.
    • After actual export of the goods, the drawback claims will be processed through the system on first come first served basis. The status of Shipping Bills and sanction of drawback claim can be ascertained from the query counter set up at the Service centre. If any query has been raised or deficiency noticed, the same will be shown on the terminal provided there. The exporter or his authorised representative may obtain a printout of the query/deficiency form the Service Centre if he so desires. The claim will come in Que. of the system as soon the reply is entered.
    • Shipping Bills in respect of goods under claim for drawback against brand rates would also be processed in the same manner, except that drawback would be sanctioned only after the original brand letter is produced to AC Export and is entered in the system. The exporter should specify the S.S No 98.01 for such provisional claim
    • All the claims sanctioned on a particular day will be enumerated in a scroll and transferred to the Nominated Bank through the system. The Bank will credit the drawback amount in their respective accounts of the exporters on the next day. Bank will send a fortnightly statement to the exporters of such credits made in their accounts.
    • The steamer agents / Airlines will transfer the EGM electronically to the system so that the physical Export of goods is confirmed. The system will process the claims only on receipt of the EGM.
  3. Procedure For Claiming Drawback On Export By Post- Section 75 Of The Customs Act

    For claiming drawback on goods exported by post, exporter is required to file his claim at the time of booking parcel with the postal authorities in the form prescribed in the Rules. The date of receipt of this form from the postal authorities by the Customs Authorities shall be treated as date of filing claim by the exporter for the purpose of Section 75 A of the Customs Act. Thus drawback is paid to the exporter within three months from the date of receipt of claim from the postal authorities. On receipt of the claim form, intimation is to be given to he exporter. Where claim form is incomplete a deficiency memo is issued within fifteen days of its receipt form the postal authorities. The exporter can resubmit this form after compliance with deficiencies within a period of 30 days. If such a claim is found to be in order, the same is acknowledged and the period of three months for payment of drawback in terms of Section 75 in such cases shall commence form the date of such acknowledgement.

    Time Limit Under Section 75

    The claims should be filed in the manner prescribed under Rule 13, read with Public Notices issued by the Custom Houses. The time limit for filing the claim is three months from the date of let export order. If the exporter was prevented by sufficient cause FORM filing the claims within three months, the Asst. Commissioner of Customs can relax the time limit by three months and the Commissioner of Customs can relax the time limit for a period of nine months

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