Customs and Central Excise Duties Drawback Rules 2017

Customs and Central Excise Duties Drawback Rules 2017

MINISTRY OF FINANCE
(Department of Revenue)
Notification No. 88/ 2017-CUSTOMS (N.T.)

New Delhi, the 21st September, 2017

G.S.R. 1177(E).—In exercise of the powers conferred by section 75 of the Customs Act, 1962 (52 of 1962) and section 37 of the Central Excise Act, 1944 (1 of 1944), the Central Government hereby makes the following rules, namely:-

1. Short title, extent and commencement.-
(1) These rules may be called the Customs and Central Excise Duties Drawback Rules, 2017.
(2) They extend to the whole of India.
(3) They shall come into force on the 1st day of October, 2017.

2. Definitions.- In these rules, unless the context otherwise requires, –
(a) “drawback” in relation to any goods manufactured in India and exported, means the rebate of duty 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 (51 of 1975) chargeable on any imported materials or excisable materials used in the manufacture of such goods;

(b) “excisable material” means any material produced or manufactured in India subject to a duty of excise under the Central Excise Act, 1944 (1 of 1944);

(c) “export”, with its grammatical variations and cognate expressions, means taking out of India to a place outside India or taking out from a place in Domestic Tariff Area (DTA) to a special economic zone and includes loading of provisions or store or equipment for use on board a vessel or aircraft proceeding to a foreign port;

(d) “imported material” means any material imported into India and on which duty is chargeable under the Customs Act, 1962 (52 of 1962);

(e) “manufacture” includes processing of or any other operation carried out on goods, and the term manufacturer shall be construed accordingly;

(f) “tax invoice” means the tax invoice referred to in section 31 of the Central Goods and Services Tax Act, 2017 (12 of
2017).

3. Drawback.– (1) Subject to the provisions of –
(a) the Customs Act, 1962 (52 of 1962) and the rules made thereunder;
(b) the Central Excise Act, 1944 (1 of 1944) and the rules made thereunder; and
(c) these rules, a drawback may be allowed on the export of goods at such amount, or at such rates, as may be determined by the Central Government :

Provided that where any goods are produced or manufactured from imported materials or excisable materials, on some of which only the duty chargeable thereon has been paid and not on the rest, or only a part of the duty chargeable has been paid; or the duty paid has been rebated or refunded in whole or in part or given as credit, under  any of the provisions of the Customs Act, 1962 (52 of 1962) and the rules made thereunder, or of the Central Excise Act, 1944 (1 of 1944) and the rules made thereunder, the drawback admissible on the said goods shall be reduced taking into account the lesser duty paid or the rebate, refund or credit obtained :

Provided further that no drawback shall be allowed –

(i) if the said goods, except tea chests used as packing material for export of blended tea, have been taken into use after manufacture;
(ii) if the said goods are produced or manufactured, using imported materials or excisable materials in respect of which duties have not been paid;
(iii) on jute batching oil used in the manufacture of export goods, namely, jute (including Bimlipatam jute or mesta fibre) yarn, twist, twine, thread, cords and ropes;
(iv) if the said goods, being packing materials have been used in or in relation to the export of –

(A) jute yarn (including Bimlipatam jute or mesta fibre), twist, twine, thread and ropes in which jute yarn predominates in weight;
(B) jute fabrics (including Bimlipatam jute or mesta fibre), in which jute predominates in weight;
(C) jute manufactures not elsewhere specified (including Bimlipatam jute or mesta fibre) in which jute predominates in weight.

 (2) In determining the amount or rate of drawback under this rule, the Central Government shall have regard to, –

(a) the average quantity or value of each class or description of the materials from which a particular class of goods is ordinarily produced or manufactured in India;
(b) the average quantity or value of the imported materials or excisable materials used for production or manufacture in India of a particular class of goods;
(c) the average amount of duties paid on imported materials or excisable materials used in the manufacture of semis, components and intermediate products which are used in the manufacture of goods;
(d) the average amount of duties paid on materials wasted in the process of manufacture and catalytic agents:
Provided that if any such waste or catalytic agent is re-used in any process of manufacture or is sold, the average amount of duties on the waste or catalytic agent re-used or sold shall also be deducted;
(e) the average amount of duties paid on imported materials or excisable materials used for containing or, packing the export goods;
(f) any other information which the Central Government may consider relevant or useful for the purpose.

4. Revision of rates– The Central Government may revise amount or rates determined under rule 3.

5. Determination of date from which the amount or rate of drawback is to come into force and the effective date for application of amount or rate of drawback.–

(1) The Central Government may specify the period upto which any amount or rate of drawback determined under rule 3 or revised under rule 4, as the case may be, shall be in force.
(2) Where the amount or rate of drawback is allowed with retrospective effect, such amount or rate shall be allowed from such date as may be specified by the Central Government by notification in the Official Gazette which shall not be earlier than the date of changes in the rates of duty on inputs used in the export goods.
(3) The provisions of section 16, or sub-section (2) of section 83, of the Customs Act, 1962 (52 of 1962) shall determine the amount or rate of drawback applicable to any goods exported under these rules.

6. Cases where amount or rate of drawback has not been determined.-
(1)(a) Where no amount or rate of drawback has been determined in respect of any goods, any exporter of such goods may, within three months from the date relevant for the applicability of the amount or rate of drawback in terms of sub-rule (3) of rule 5, apply to the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, having jurisdiction over the place of export, for determination of the amount or rate of drawback thereof stating all the relevant facts including the proportion in which the materials or components are used in the production or manufacture of goods and the duties paid on such materials or components:

Provided that-
(i) in case an exporter is exporting the aforesaid goods from more than one place of export, he shall apply to the Principal Commissioner or Commissioner of Customs, having jurisdiction over any one of the said places of export;
(ii) the Assistant Commissioner of Customs or Deputy Commissioner of Customs, as the case may be, may extend the aforesaid period of three months by a period of three months and the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, may further extend the period by a period of six months;
(iii) the Assistant Commissioner of Customs or Deputy Commissioner of Customs or Principal Commissioner of Customs or Commissioner of Customs, as the case may be, may, on an application and after making such enquiry as he thinks fit, grant extension or refuse to grant extension after recording in writing the reasons for such refusal;
(iv) an application fee equivalent to 1% of the FOB value of exports or one thousand rupees whichever is less, shall be payable for applying for grant of extension to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, as the case may be and an application fee of 2% of the FOB value or two thousand rupees whichever is less, shall be payable for applying for grant of extension to the Principal Commissioner of Customs or Commissioner of Customs, as the case may be.

(b) On receipt of an application under clause (a), the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, shall, after making or causing to be made such inquiry as it deems fit, determine the amount or rate of drawback in respect of such goods.

(2)(a) Where an exporter desires that he may be granted drawback provisionally, he may, while making an application under clause (a) of sub-rule (1) apply to the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, that a provisional amount be granted to him towards drawback on the export of such goods pending determination of the amount or rate of drawback under clause (b) of that sub-rule.

(b) The Principal Commissioner of Customs or Commissioner of Customs, as the case may be, may, after considering the application, allow provisionally payment of an amount not exceeding the amount claimed by the exporter in respect of such export:

Provided that the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, may, for the purpose of allowing provisional payment of drawback in respect of such export, require the exporter to enter into a general bond for such amount, and subject to such conditions, as he may direct; or to enter into a bond for an amount not exceeding the full amount claimed by such exporter as drawback in respect of a particular consignment and binding himself, –

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8. Cases where no amount or rate of drawback is to be determined.

9. Upper Limit of Drawback amount or rate.-

10. Power to require submission of information and documents.

11. Access to manufactory

12. Procedure for claiming drawback on goods exported by post

13. Statement/Declaration to be made on exports other than by Post

14. Manner and time for claiming drawback on goods exported other than by post

16. Supplementary claim. 

17. Repayment of erroneous or excess payment of drawback and interest.

18. Recovery of amount of Drawback where export proceeds not realised.

19. Power to relax

20. Repeal and saving

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