drawback vis-a-vis excise rebate/ refund

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 September 2010 Facts of the case:
We are a small manufacturer exporter and we intend to export 100%.no local sales except scrap material obtained from manufacturing process.

We fall under CETSH 84159000 (parts of AC machine, parts of AC ducting)

We dont have any excise duty paid capital assets. We only have duty paid inputs. We have obtained vat registration and will issue form H for non-charging of vat on our inputs.

Query:
What would be more beneficial for us
i.e. whether we should go for drawback for which i enquired the rate of DBK is 1.1% with and without cenvat credit OR we should go for rebate under rule 18 / rule 19

One of my friend told that u better go for drawback as u will not have to tackle excise authorities at all.

Pl help us

Arbind Aggarwal

Arbind Aggarwal (Expert)
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27 September 2010 All Industry Rate of Drawback is always less than the actual incidence of duty. The general rate of excise duty is 10% and as u are saying DBK rate is 1%. You see the difference.

You should go for rebate either Input Stage Rebate or take CENVAT Credit and pay duty at the time of removal for export and take rebate. Rebate claim will take maximum three months.

IInd option is Brand Rate Fixation for duty draw back where you can claim DBK equal to the input tax credit.

Further you can get refund of service tax paid on the input services if you are exporting all the materials.

The best is you can procure inputs without payment of duty under rule 19 (notification no. 43/2001 CE).

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