Government of India
Ministry of Finance, (Department of Revenue)
Central Board of Excise & Customs
Circular No. 27 / 2012-Customs
New Delhi, dated 5th October, 2012
To
All Chief Commissioners of Customs/Customs (Prev.)
All Chief Commissioners of Central Excise/Customs & Central Excise
All Director Generals under CBEC
All Commissioners of Customs/Customs (Prev)
All Commissioners of Central Excise/Customs & Central Excise
Subject: All Industry Rates of Duty Drawback 2012-13 - Reg.
Ma’am/Sir,
The Ministry has notified the All Industry Rates (AIR) of Duty Drawback 2012-13
vide
Notification No. 92 / 2012- Customs (N.T.), dated 4.10.2012. The
notification shall come into force on 10th October, 2012.
- As in previous years, the drawback rates have been determined on the basis of
certain broad parameters including, inter alia, prevailing prices of inputs,
Standard Input Output Norms, share of imports in the total consumption of
inputs, FOB value of export goods, the applied rates of central excise and
customs duties, the factoring of incidence of service tax paid on taxable
services which are used as input services in the manufacturing or processing of
export goods, factoring incidence of duty on HSD/Furnace Oil.
- Some of the broad aspects, from amongst the changes notified with respect to
AIR of duty drawback and entries in the Schedule, are –
- Most, but not all, of the items that were already covered under the duty
drawback schedule prior to 1.10.2011 [that is, before last year’s (2011-12) duty
drawback schedule was issued] will see an increase from the existing AIR. Some
of the items that will see a reduction in AIR include leather trunks and
handbags, wool yarn and fabric, gaskets (84.84), lawn tennis balls, cricket
balls, felt tipped/porous tipped pens and markers, goods of heading 90.02 to
90.05.
- In continuation of a transitory arrangement, most of the items incorporated
in last year’s (2011-12) duty drawback schedule, from the erstwhile DEPB scheme,
will see a reduction in the AIR rates.
- The existing residuary rate of 1% ad valorem (all customs) will now be
either 1% composite rate with 0.3% customs component, or it will see an increase
to 1.5% (customs component) or 2% (customs component).
- With certain exceptions, the drawback caps have not been assigned where the
higher of the composite rate/customs component of the rate is 3.5% or lower.
Where the AIR will be above 3.5%, not every entry has been assigned the drawback
caps. Where drawback caps have been assigned, these will by and large see a
relative increase.
- In certain cases separate tariff entries have been created, as for calcined
bauxite, silicon dioxide, gauze swabs, dairies with leather covers, leather
insoles, sarees with or without blouse piece under chapters 50, 52 and 54,
women’s/girl’s blouses with tightening at the bottom, footwear with TPR/PU soles
and canvas uppers, worked human hair, imitation jewellery made up of iron, motor
cars with manual transmission, motor cars with automatic transmission,
multi-speed bicycles etc. Under heading 3004 (medicaments), dosage and pack-size
specifications for many items have been removed. Composite rates have been
assigned in a few cases such as under heading 7321, 7415 and 8535. The unit for
the drawback cap has been changed from litre to kilogram for printing inks of
heading 3215.
- Drawback has been restored for export of Guar Gum (Tariff Item No. 130201)
by providing a specific composite rate with a specific customs component.
- In order to continue with the existing classification of sports gloves under
the drawback schedule, an appropriate exception, to the principle of alignment
at four digit level with the First Schedule to the Customs Tariff Act, 1975, has
been specified in the Notes and Conditions in the Notification.
- It is requested to download the notification with the Schedule for 2012-13
from Board’s website (www.cbec.gov.in) and carefully peruse it and thereby take
note of all the specific changes notified. As before, it may be ensured that
exporters do not avail of the 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. Since the changes include
specification of composite rates in many cases, it needs recalling that the
composite rate (when Cenvat facility has not been availed) is not available,
inter alia, when rebate of central excise duty on inputs is availed or inputs
are procured without payment of central excise duty, under rule 18 or 19 (2) of
Central Excise Rules 2002, respectively. The due diligence is also expected to
be exercised to prevent any misuse, inter alia, in the light of not all items
having drawback caps and the assigned drawback caps seeing a relative increase.
- While every effort has been made to avoid errors / omissions, these are not
ruled out. If an error is noticed, please immediately inform the Board for
appropriate corrective action. Difficulties faced, if any, in implementation of
the changes may also be brought to Board’s notice. Suitable public notice and
standing order may be issued for guidance of the trade and officers. Receipt of
this Circular may be acknowledged.
(Rajiv Talwar)
Joint Secretary
F. No. 609/110/2012-DBK
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