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Types of Drawback

There are two types of drawback.

  • One is called drawback under Section 74 of the Customs Act, 62 which allows drawback of duty paid on goods originally imported on payment of duty and subsequently re-exported. The manner and time limit for filing the claims are governed by "Re- export of Imported Goods (Drawback of Customs duties) Rules, 1995.

In this category, two types of cases are covered viz .,

  1. Imported goods exported as such i.e. without putting into use 98% of duty is refunded and
  2. Imported goods exported after use the percentage of duty is refunded according to the period between the date of clearance for home consumption and the date when the goods are placed under Customs control for exports. The percentage of duty drawback is notified under Notification. No 19 Cus , dated 6 th Feb, 1965 as amended from time to time.
  • The other scheme is payment of drawback under Section 75 and Rules made thereunder at specified rates on export of goods manufactured in India. The manner and time limit for filing the claims are prescribed under the Customs and Central Excise Duties Drawback Rules 1995 as amended from time to time.
  • The Central government notifies the Drawback rates for various products either on a general basis (all industry rates) or for individual exporters(brand rates) as the case may be.
  • Drawback sanctioned under section 75 has a two tier system involving
    1. Fixation of rates by the Directorate of Drawback in the Central Board of Excise and Customs and
    2. Disbursement of drawback amount by the Customs Houses and/ Central Excise Commissionerate .

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