Government of India Ministry of Finance, Department of Revenue Central
Board of Excise & Customs Circular No. 38/2017-Customs
New Delhi, dated 22nd September, 2017
To
Principal Chief Commissioners / Principal Directors General,
Chief Commissioners / Directors General, Principal
Commissioners/Commissioners, all under CBEC
Subject: The Customs and Central Excise Duties Drawback Rules, 2017 and All
Industry Rates (AIRs) of Drawback related changes -reg.
Madam/Sir,
The Central Government has notified the Customs and Central Excise Duties
Drawback Rules, 2017 (hereinafter referred to as Drawback Rules 2017) vide
Notification No. 88/2017-Customs (N.T.) dated 21.9.2017 to replace the Customs,
Central Excise Duties and Service Tax Drawback Rules, 1995. These Rules takes
effect from 1.10.2017. The Central Government has also revised All Industry
Rates (AIRs) of Drawback vide Notification No. 89/2017-Customs (N.T.) dated
21.9.2017 which comes into force on 1.10.2017. The notifications may be
downloaded from Board’s website and carefully perused for details. Some of the
important changes in the Rules and AIR Schedule notification are highlighted
below –
a) Definition of Drawback has been amended to provide for drawback of Customs
and Central Excise duties excluding integrated tax leviable under sub-section
(7) and compensation cess leviable under sub-section (9) respectively of section
3 of the Customs Tariff Act, 1975 chargeable on any imported materials or
excisable materials used in the manufacture of goods exported;
(b) References to input services and Service Tax have been omitted;
(c) As drawback is limited to incidence of duties of Customs on inputs used
and remnant Central Excise Duty on specified petroleum products used for
generation of captive power for manufacture or processing of export goods, only
general AIRs under column (4) with caps under column (5) have been provided in
the Schedule. For claiming these general AIRs, the relevant tariff item have to
be suffixed with suffix ‘B’ e.g. for export of goods covered under tariff item
640609, the drawback serial no. should be declared as 640609B;
(d) The Composite rates of Drawback are being discontinued w.e.f. 1.10.2017.
Hence, the composite rates and Notes and Conditions pertaining to CENVAT credit,
rebate of Central Excise duty, etc. stand omitted. Thus, the declaration
required to be given by an exporter for claiming composite rate of drawback
w.e.f. 1.7.2017 as per Circular no. 32/2017-Customs dated 27.7.2017 is no longer
required w.e.f. 1.10.2017;
(e) In case of AIR claim against tariff item numbers 711301, 711302 and
711401, the requirement of declaration by exporter as per Circular no.
30/2016-Customs dated 24.6.2016 is no longer required w.e.f. 1.10.2017;
(f) The notification also specifies the alternative AIRs on garment exports
(items covered under Chapter 61 and 62) made against the Special Advance
Authorization (para 4.04A of FTP 2015- 20) in discharge of export obligations in
terms of Notification No. 45/2016-Customs dated 13.8.2016. These AIRs are
provided in ‘Table’ in the said notification. For claiming these alternative
AIRs, the relevant tariff item has to be suffixed with suffix ‘D’ instead of the
usual suffix ‘B’;
(g) Para 3 of the Notification no. 89/2017-Customs (N.T.) dated 21.9.2017
specifies the amount for payment as provisional drawback by proper officer of
Customs in terms of sub-rule (3) of Rule 7 of the Drawback Rules, 2017. This is
equivalent to the AIR corresponding to the export goods, if applicable, and
subject to the same conditions as applicable to a claim for that component. The
amount paid as provisional drawback under the above dispensation shall be taken
into account by the Customs to authorize further provisional drawback, where
necessary;
(h) For fixation of Brand Rate, Circular No. 23/2017-Customs dated 30th June, 2017
may be referred. The brand rate facilitation would continue and there should be
no delay by Customs formations in finalizing applications for fixation of brand
rate;
(i) Where in respect of export product, NIL rate or no rate of drawback is
provided in AIR Schedule, an application for fixation of Brand Rate under Rule 7
of the Drawback Rules, 2017 shall not be admissible. In such situation,
application for fixation of Brand Rate may be filed under Rule 6 of the Drawback
Rules, 2017;
(j) In terms of Rule 20 of the Drawback Rules, 2017, brand rates of drawback
already fixed will not apply for exports with Let export date 1st Oct, 2017 onwards.
Thus, exporters will be required to apply fresh for fixation of Brand Rate under
Rule 6 or Rule 7 for such exports.
2. The Commissioners are expected to ensure due diligence to prevent any
misuse. The shipping bills with parameters considered to be sensitive should be
handled with adequate care at the time of export.
3. There is also need for continued scrutiny for preventing any excess
drawback arising from mismatch of declarations made in the Item Details and the
Drawback Details in a shipping bill.
4. With trade facilitation in view, tenure of the Drawback Committee
constituted by the Central Government has been extended to 31st Dec, 2017 to
expeditiously look into issues arising from the changes made. Accordingly,
exporters may immediately come forward with representations with supporting data
and documents, if any, for higher rates than rates provided.
5. Suitable public notice and standing order should be issued for guidance of
the trade and officers. Any inconsistency, error or difficulty faced should be
intimated to the Board. The Commissioners may also inform, with appropriate
data, the details of specific products where drawback cap needs to be imposed.
Yours faithfully, (Dinesh Kumar Gupta) Director (Drawback) Tel:
23360581 [F. No. 609/76/2017-DBK]
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