Policy

CBEC revises duty-drawback rates

| Updated on: Nov 01, 2016

The government has revised the duty drawback rates with effect from November 15.

The revised duty drawbacks provide composite rates for products such as rubber parts (for automobile and machinery) and children’s pictures. It has also changed descriptions in certain tariff items such as packaged rice, rubber parts to prevent disputes and simplify procedures.

“These take into account relevant broad average parameters such as prevailing prices of inputs, input output norms, share of imports in input consumption, the rates of central excise and customs duties, incidence of service tax … value of export goods,” said the Central Board of Excise and Customs.

Duty drawback is a relief or refund of certain types of customs and central excise duties as well as service tax on imports of inputs or raw materials that are used to manufacture goods for exports.

The CBEC further said that as trade facilitation measure, the tenure of the Drawback Committee has been extended to expeditiously review issues arising from the changes made.

The government has also amended the Customs, Central Excise and Service Tax Drawback Rules, 1995 which did not allow AIR drawback to exports if the amount of drawback was less than one per cent of the freight on board value of export, except where the drawback per shipment was over ₹500.

The CBEC has also directed field offices to continue scrutiny and preventing any excess drawback in a shipping bill.

It has also said that exporters should not avail themselves of refund of service tax paid on taxable services which are used as input services in the manufacturing or processing of export goods through any other mechanism while claiming AIR.

Published on January 15, 2018

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