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Circulars related to Drawback

Circular No.ES/105/2017-18                                                    July 04, 2017

To: Members of the Council

Sub:  Circulars related to Drawback

Dear Member,

CBEC has issued the following circulars related to Drawback:

The definition of “drawback ” under Rule 2 (a) of the Re-export Rules, 1995 has been suitably amended  to  include  refund  of  duty  or  tax  or  cess  as  referred  in  the  CTA,  1975. Notification No.57/2017-Customs (N.T.) dated 29.6.2017 may be referred in this regard.

In order to prevent dual benefit while sanctioning drawback under Section 74 of the Customs Act,  1962,  it  may  be  ensured  that a  certificate  duly  signed  by  the Central/State/UT GST  officer, having jurisdiction over the exporter is obtained, that no credit of integrated tax /compensation cess paid on imported goods has been availed or no refund of such credit or integrated tax paid on re-exported goods has been claimed. All other extant instructions in respect of drawback claims under Section 74 remain unchanged.

The salient features of changes in Transition Period and AIRs introduced vide Notification no. 59/2017 dated 29.06.2017, which are effective from 1.7.2017 are briefly given in the above Circular No. 22/2017.

As you may be aware, in terms of Rule 6 and Rule 7 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, the work pertaining to fixation of Brand rate of Drawback is undertaken by the Central Excise Commissionerate having jurisdiction over the factory where export goods are manufactured. In this context, Board’s Circular No. 14/2003-Cus dated 6.3.2003, DO letter No. 609/110/2005-DBK dated 26.8.2005, Instruction No. 603/01/2011-DBK dated 11.10.2013, Circular No. 29/2015-Cus dated 16.11.2015 and Circular No. 54/2016-Cus dated 22.11.2016 governing the procedure for handling of Brand rate work may be referred. Once the Brand rate letter (provisional or final) is issued by such Commissionerate, the respective ports of export are required to calculate and disburse the drawback amount to the exporter. This Circular explains the changes being brought about in Brand rate mechanism in the context of introduction of Goods and Services Tax (GST) w.e.f. 01.07.2017.

In view of implementation of GST, Board has decided to re- organize the Customs functions hitherto handled by Central Excise formations. In this context, it has been decided that in respect of supplies made by DTA unit to SEZ Unit or developer and where the SEZ Unit or developer issues a disclaimer to the DTA supplier and drawback is claimed by the DTA supplier, the drawback shall be processed and paid by the office of Principal Commissioner or Commissioner of Customs/ Customs (Preventive) in whose jurisdiction the DTA Unit falls. Further, the fixation of Brand rate in case of supplies from DTA to SEZ Unit or developer, if required, shall also be done by the office of said Principal Commissioner/ Commissioner. This shall apply to all fresh applications/ claims filed from 1.7.2017 onwards.

For more information, members may kindly refer to the above Circulars and make note of the same.

Thanking you,


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