Duty drawback

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kuldeep singh

kuldeep singh (Querist)
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12 September 2013 how to claim duty drawback in case of import and export???

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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12 September 2013 Drawback :: Procedure

(1) PROCEDURE FOR CLAIMING DRAWBACK UNDER THE EDI SYSTEM

The exporter has to file a shipping bill in Electronic Data Interchange (EDI) for export of goods under a claim for drawback. The electronic shipping bill itself shall be treated as the claim for drawback and there is no need for filing separate drawback claims. At JNCH the scheme of computerised processing of Drawback claims under the Indian Customs EDI System is applicable for all exports except in respect of DBK claims relating to cases of re-export of imported goods under Section 74 of the Customs Act, 1962. The procedure for claiming drawback under the EDI system is explained below:-

A. In the EDI system the exporter are required to open their accounts with the Bank nominated by the Custom House or a branch anywhere in India of any of banks having core banking facility of transferring the funds electronically through NEFT/ RTGS. This has to be done to enable direct credit of drawback amount to their accounts, obviating the need for issue of cheques. The exporters are required to indicate their Account No. in the declaration form called as Annex.-B along with the details of the bank through which the export proceeds are to be realised. S.D.F declaration is required in lieu of GR –1 FORM.

B. For export of goods under claim for drawback, as per Rule 13 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 the exporters will file the claim for drawback accompanied by the following documents:-

(i) copy of export contract or letter of credit, as the case may be,

(ii) copy of Packing list,

(iii) copy of ARE-1 wherever applicable,

(iv) insurance certificate, wherever necessary, and

(v) copy of communication regarding rate of drawback where the drawback claim is for a rate determined by the Commissioner of Central Excise or the Commissioner of Customs and Central Excise, as the case may be under rule 6 or rule 7 of these rules.

C. Under PUBLIC NOTICE- 54 /07 of JNCH the following documents are required to be produced at the time of examination of the cargo.

1. CENVAT Certificate/ Self declaration known as Annexure 1 when the Central Excise portion of the drawback is claimed.

2. Duty-free finished Leather Declaration in case of leather and leather articles.

3. Chartered Engineer’s certificate wherever applicable.

4. Invoice giving complete description of the goods under export. Invoice with the declaration of wool content in case of woolen carpets/floor covering.

5. Packing list giving weight/ quantity of individual items when the drawback is based on unit weight/ quantity.

6. Test-Reports/ Sample Drawn by Central Excise authorities in case of Factory Stuffed Containers in terms of P.N.03/2007 dtd. 09.02.2007 in case Drawback is based on the composition.

7. NOC from the respective agencies/ authorities like WLRO, ADC, APEDA, etc. wherever applicable.

D. The steamer agents will transfer the EGM electronically to the system so that the physical Export of goods is confirmed. The system will process the claims only on receipt of the EGM.

E. After filing of EGM and printing of EP Copy the shipping bills automatically move online to Drawback Queue in the EDI System for sanction. It may be noted that unless EGM is filed and EP Copy is printed, the shipping bills do not move online to Drawback Queue and such claims cannot be said pending with the department for drawback purpose.

F. The drawback claims are processed through the system on first come first served basis. Superintendent is the competent authority for sanctioning drawback up to Rs. one lakh and Assistant Commissioner for above one lakh. Superintendent has to confirm whether the goods under drawback claim have been properly classified or not. He can change the classification of the goods and on changing classification; the system recalculates drawback amount.

G. The status of Shipping Bills and sanction of drawback claim can be ascertained from the EDI Service Centre or Drawback Helpdesk. Status of S/Bill and query can also be ascertained online through automatic email by sending e-mail to docktrack.jnch@icegate.gov.in and mentioning the subject of the mail as exp:dbkpend:sbno:SB1,SB2,SB3 or exp:dbkpend:iec: , to get status of drawback claims for particular SBs or of all drawback claims, as provided under facility notice no. 10/2008 dated 18.01.2008.

H. On raising of a query the claim moves out of drawback queue to Exporter queue in the System. Such claims are not regarded pending with the Department and are deemed to have been returned to the exporter with query or deficiency memo as per Rule 13 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995. As per this Rule where the exporter resubmits the claim for drawback after complying with the requirements specified in the deficiency memo, the same will be treated as a claim filed under sub-rule (1) of Rule 13 for the purpose of Section 75A of the Customs Act, 1962. The exporter or his authorised representative may obtain a printout of the query/deficiency from the Service Centre if he so desires. The claim will come in Queue of the system as soon the reply is entered.

I. Shipping Bills in respect of goods under claim for drawback against brand rates would also be processed in the same manner, except that drawback would be sanctioned only after the original brand letter is produced to AC Export and is entered in the system. The exporter should specify the S.S No 98.01 for such provisional claims.

J. All the claims sanctioned during a particular period will be enumerated in a scroll and transferred to the Nominated Bank through the system. The Bank will credit the drawback amount in their respective accounts of the exporters on the next day. Bank will send a fortnightly statement to the exporters of such credits made in their accounts.

K. The facility of Payment of Drawback in the Exporter’s Core Banking Enabled Bank Account in any Branch of any Bank anywhere in the Country has also been introduced vide Circular No. 01/2008-Systems dated 24.06.08. It has been pointed out that when the Core banking branches forward the statement to the exporters, the Shipping bill details are being omitted owing to certain limitation in the banking software employed for NEFT/RTGS due to which the exporters are facing difficulty in correlation of the Drawback claimed and that received. The issue has already been taken up with RBI, since these transactions are governed by guidelines issued by the RBI in this regard from time to time.

(2) PROCEDURE TO CLAIM DRAWBACK IN CASES WHERE THE RATE OF DRAWBACK IS NOT FIXED :

In cases where the amount or Rate of Drawback has not been determined, as per Rule 6 of the Drawback Rules 1995, the exporter should apply in writing to the to the Commissioner of Central Excise having jurisdiction over the manufacturing unit for determination of the amount or Rate Drawback within 60 (sixty) days from the date of “Let Export Order” given by the proper officer of Customs on the relevant Shipping Bill. The Commissioner of Central Excise may allow a further period of 30 (thirty) days if it is satisfied that the manufacturer or exporter was prevented by sufficient cause from filing the application within sixty days.

The amount of Rate of Drawback determined in such cases is commonly known as “Brand Rate of Drawback”. This amount or Rate of Drawback so determined is applicable to the specified goods exported by a particular exporter during a particular period as mentioned in the order issued by the Central Excise.

If the exporter desires, the Commissioner of Central Excise may grant Drawback provisionally, on specific application of exporter in writing, without waiting for verification of the data furnished by the exporters and authorise the Commissioner of Customs at the Port of Export to pay provisional amount subject to execution of a bond with Surety or Security for a suitable amount undertaking to refund the excess amount paid, if any.

(3) PROCEDURE TO GET THE CORRECT RATE FIXED IN CASES WHERE THE RATE OF DRAWBACK ALREADY DETERMINED IS FOUND LOW

In cases where the amount or Rate of Drawback is already fixed for any goods is found by the exporter that the amount or Rate already determined is less than four-fifth (4/5) of the duties paid on the materials or components used in the production or manufacture of the export goods, as per Rule 7 of the Drawback Rules 1995, the exporter should apply in writing to the Commissioner of Central Excise for determination of the amount of Rate of Drawback within 60 (sixty) days from the date of “Let Export Order” given by the proper officer of Customs on the relevant Shipping Bill. The Commissioner of Central Excise may however, allow a further period of 30 (thirty) days if it is satisfied that the manufacturer or exporter was prevented by sufficient cause from filing the application within sixty days.

The amount or rate of drawback determined in such cases is commonly known as “Special brand Rate of Drawbacks”. This amount or Rate or Drawback so determined is applicable to the specified goods exported by a particular exporter during the particular period as mentioned in the order issued by the Central Excise.

(4) PROCEDURE FOR CLAIMING DRAWBACK UNDER SECTION 74 OF CUSTOMS ACT 1962 WHEN THE GOODS ARE RE-EXPORTED.

In the case of re-exports other than by post the exporter has to file a Shipping Bill or Bill of Export in the prescribed form with the Customs and make a declaration on such document to the effect that –

i) The export is being made under a claim for drawback under Section 74 of the

Customs Act.

ii) That the duties of customs were paid on the goods imported.

iii) The goods were not taken into use after importation.

OR

The goods were taken into use.

The procedure for claiming drawback under Section 74 of Customs Act 1962 when the goods are re-exported other than by post as per Rule 5 of the Re-Export Of Imported Goods (Drawback Of Customs Duties) Rules, 1995, is as given below:

(1) A claim for drawback under these rules shall be filed in the form at Annexure II within three months from the date on which an order permitting clearance and loading of goods for exportation under section 51 is made by proper officer of customs:

Provided that the Assistant Commissioner of Customs or Deputy Commissioner of Customs may, if he is satisfied that the exporter was prevented by sufficient cause to file his claim within the aforesaid period of three months, allow the exporter to file his claim within a further period of three months.

(2) The claim shall be filed alongwith the following documents, namely :-

(a) Triplicate copy of the Shipping Bill bearing examination report recorded by the proper officer of the customs at the time of export.

(b) Copy of Bill of Entry or any other prescribed document against which goods were cleared on importation.

(c) Import invoice.

(d) Evidence of payment of duty paid at the time of importation of the goods.

(e) Permission from Reserve Bank of India for re-export of goods, wherever necessary.

(f) Export invoice and packing list.

(g) Copy of Bill of lading or Airway bill.

(h) Any other documents as may be specified in the deficiency memo.

(3) The date of filing of the claim for the purpose of section 75A shall be the date of affixing the Dated Receipt Stamp on the claims which are complete in all respects, and for which an acknowledgement shall be issued in such form as may be prescribed by the Commissioner of Customs.

(4) (a) Any claim which is incomplete in any material particulars or is without the documents specified in sub-rule (2) shall not be accepted for the purpose of section 75A and such claim shall be returned to the claimant with the deficiency memo in the form prescribed by the Commissioner of Customs within fifteen days of submission and shall be deemed not to have been filed;

(b) Where exporter complies with requirements specified in deficiency memo within thirty days from the date of receipt of deficiency memo, the same will be treated as a claim filed under sub-rule (1).

(5) Where any order for payment of drawback is made by the Commissioner (Appeals), Central Government or any Court against an order of the proper officer of customs, the manufacturer exporter may file a claim in the manner prescribed in this rule within three months from the date of receipt of the order so passed by the Commissioner (Appeals) Central Government or the Court, as the case may be.

Supporting Documents Required For Processing Drawback Claim under Section 74

Triplicate copy of the Shipping Bill bearing examination report recorded by the proper officer of the customs at the time of export.

Copy of the Bill of entry or any other prescribed documents against which goods were cleared for importation.

Import invoice.

Evidence of payment of duty paid at the time of importation of goods.

Permission from the Reserve Bank of India for re-exports of goods, wherever necessary.

Export invoice and packing list.

Copy of the Bill of Lading or Airway bill.

Any other documents as may be specified in the deficiency Memo.

Time Limit under Section 74

In order to claim drawback under Section 74 the goods should be entered for export within two years from the date of payment of duty on the importation thereof. Provided that in any particular case the period of two years may on sufficient cause shown be extended by the by the Central Board of Customs and Central Excise by such period as it may deem fit.

The time limit have to be computed from the date of payment of duty up to the date of entry of goods for export under Sec 50 of the Customs Act for export by air or sea, under Section 77 for baggage items and Under Section 83 of the Customs Act for export by post

The claims should be filed in the manner prescribed under Rule 5 of Re-export of Imported Goods (Drawback of Customs Duties) Rules,1995, read with Public Notices issued by the Custom Houses. The time limit for filing the claim is three months from the date of let export order. If the exporter was prevented by sufficient cause from filing the claims within three months, the Asst. Commissioner of Customs can relax the time limit by three months.

Duty Drawback on Goods Exported

The claim for drawback is processed under the following systems:

1. Manual System

2. EDI System

3. By Post