The Hindu Business Line : Terms for duty drawback on un-assembled goods

THE Finance Ministry has come up with a rider for allowing duty drawback on goods exported in completely knocked down (CKD)/semi-knocked down (SKD) condition or in an un-assembled condition.

The Central Board of Excise and Customs (CBEC) has now said that drawback (all industry rate or brand rate) may be extended in such cases only when an exporter furnishes adequate evidence to substantiate that all the components/parts etc being exported constitute the complete product.

This stipulation is being seen as a move aimed at safeguarding revenue interests.

The CBEC has through a circular made it clear that goods exported in CKD/SKD/unassembled condition would be entitled to the All Industry Rate of Drawback if the same was available on goods when exported in complete/assembled form.

Similarily, brand rate of drawback would also be admissible for goods exported in CKD/ SKD/ unassembled condition.

Trade and industry had represented that the All Industry Rates of Duty Drawback as well as brand rates of duty drawback should be allowed on export products even when they are exported in CKD/SKD condition or in an unassembled condition.

They had highlighted the current trade practice where importers of other countries, especially those from developing countries, insist on dispatch of export goods such as televisions, air-conditioners, washing machines, refrigerators etc in CKD or SKD condition.

Duty drawback payments are made to exporters to neutralise the customs and excise duties paid on inputs used in the manufacture of exportable products.

There are generally two types of duty drawback rate - all industry rate or the brand rate.

An exporter can opt for a brand rate in cases where the export product does not have any all industry rate or where the notified all industry rate was considered to be insufficient to compensate for the customs/central excise duties on the inputs used for manufacturing the export product.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page