Introduction: In a significant development for exporters, the Government of India, through the Ministry of Finance’s Department of Revenue, has released a Public Notice regarding the revision of All Industry Rates (AIRs) of Duty Drawback. This update, dated October 27, 2023, outlines essential changes and clarifications concerning Duty Drawback rates and their implications for the export community.
Detailed Analysis: The key highlights of this update include:
1. Revised AIRs with Caps: The notification introduces revised AIRs with caps for specific tariff items. To claim these revised rates, exporters must use the suffix ‘B’ for goods covered under relevant tariff items. For example, for goods under tariff item (TI) 610901, the drawback serial number should be declared as 610901B.
2. AIRs for Specific Categories: The update specifies AIRs for items covered under Chapters 61 and 62, primarily related to apparel and clothing accessories, made under the Special Advance Authorization Scheme. To claim these rates, exporters should use the suffix ‘D’ instead of ‘B.’ For example, for goods under Special Advance Authorization Scheme covered under tariff item (TI) 610901, the drawback serial number should be declared as 610901D.
3. Increased AIRs for Various Categories: The revision includes increased AIRs for items in categories such as chemicals (Chapter 29), leather and leather articles (Chapters 41, 42, and 64), textiles (Chapters 50 to 63), carpets (Chapter 57), glass and glassware (Chapter 70), gold and silver jewelry (Chapter 71). These increases are influenced by factors like changes in duties, imported input prices, and export goods’ FOB values.
4. Rationalized AIRs: The update also rationalizes AIRs for certain items, including textiles made of nylon, based on factors like changes in BCD rates and input prices.
5. New Tariff Items: The Schedule now includes new tariff items for sectors like sugar confectionery, chemicals, pharma, plastic, leather articles and footwear, cotton, man-made fibers/fabrics, apparels, footwear, stone articles, arms and ammunition, and furniture. Additionally, some existing tariff item descriptions have been revised to facilitate product differentiation and tax neutralization.
6. Caps for Duty Drawback: Appropriate caps for duty drawback amounts have been specified where necessary to set an upper limit on duty drawback claims.
7. Reclassification of ‘Schaeffers Acid’: The duty drawback classification for ‘Schaeffers Acid’ has been updated from Tariff Item (TI) 291501 to TI 290801 in line with its correct classification under the Customs Tariff. The rate and cap for this item remain unchanged.
8. Clarification on Tariff Item 610902: In response to trade associations’ representations, the update clarifies that products containing cotton and more than one man-made fiber are covered by tariff item 610902. This addresses concerns where drawback claims were denied due to the reference to “manmade fiber” in singular, emphasizing that words in singular also include plural and vice versa.
Conclusion: This Public Notice (No. 44/2023) from the Office of the Commissioner of Customs, Export Commissionerate, Chennai, brings to light the revisions in All Industry Rates (AIRs) of Duty Drawback. Exporters, customs brokers, and members of the trade community are encouraged to stay informed about these changes, which come into effect on October 30, 2023. The Government of India aims to support and facilitate trade by ensuring accurate rates and providing clear guidelines for claiming Duty Drawback.
Customs brokers and trade associations are urged to disseminate this information widely among their members to promote awareness and compliance. Understanding these revisions is crucial for exporters to maximize the benefits and incentives provided by the Duty Drawback scheme.
This initiative aligns with the government’s efforts to streamline trade and encourage exports, ultimately contributing to the growth of the Indian economy.
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CUS/DBK/MISC/1138/2023-DBK-O/o Commr-Cus-Exp-Chennai
I/1502814/2023
Telephone: 044-25254464, 25221960
Fax: 044-25221861
Email: drawback-chennai4@gov.in
GOVERNMENT OF INDIA
MINISTRY OF FINANCE, DEPARTMENT OF REVENUE
OFFICE OF THE COMMISSIONER OF CUSTOMS, EXPORT
COMMISSIONERATE
CUSTOM HOUSE, NO. 60, RAJAJI SALAI, CHENNAI- 600 001.
F.No. CUS/DBK/MISC/1138/2023-DBK
DIN: 20231073MZ0000777AD1
DATED: 27.10.2023
PUBLIC NOTICE No.- 44/2023
Subject: Revision of All Industry Rates (AIRs) of Duty Drawback-reg.
Madam/Sir,
Attention of all the Exporters, Customs Brokers and all members of trade is invited to the Board’s Circular No. 26/2023-Customs dated 26th October, 2023 wherein it has been communicated that the Central Government has notified the revised All Industry Rates (AIRs) of Duty Drawback, vide Notification No. 77/2023-Customs (N.T.) dated 20th October, 2023 which will come into force on 30th October, 2023. The notification may be downloaded from the Board’s Website and carefully perused for details.
2. Important Changes are highlighted below:-
i. Each tariff item in the Schedule, annexed to the above-mentioned Notification, has been provided with an AIR specified under column (4) with cap of Duty Drawback amount, wherever applicable, given under column (5). For claiming these AIRs, the relevant tariff item has to be suffixed with letter ‘B’. For example, for export of goods covered under tariff item (TI) 610901, the drawback serial number should be declared as 610901B;
ii. The Notification also specifies, in the Table annexed thereto, AIRs on export of items covered under Chapters 61 and 62 of the Schedule (viz. articles of apparel and clothing accessories) made under Special Advance Authorization Scheme (Para 4.04A of Foreign Trade Policy 2015-2020 and Foreign Trade Policy, 2023) in terms of Notification No. 45/2016-Customs dated 13.08.2016 and Notification No. 27/2023-Customs dated 01.04.2023. For claiming these AlRs, the relevant tariff item has to be suffixed with letter ‘D’, instead of the usual suffix ‘B’ mentioned above. For example, for export of goods under Special Advance Authorization Scheme covered under tariff item (TI) 610901, the drawback serial number should be declared as 610901D;
iii. AIRs of Duty Drawback have been increased for certain items pertaining to chemicals (Chapter 29), finished and lining leather, leather articles and footwear (Chapter 41, 42 and 64), textiles and articles thereof made of silk/wool/cotton/MMF other than of nylon) (Chapter 50 to 63), carpets (Chapter 57), glass and glass ware (Chapter 70) and gold jewellery and silver jewellery/article (Chapter 71), The increase in AIRs is on account of various factors such as changes in duties, price (CIF) of imported inputs, FOB value of export goods, import intensity of inputs etc.;
iv. AIRs have been rationalized for various items, including textiles and articles thereof made of nylon, on account of reasons such as decrease in BCD rate, changes in price (CIF) of imported inputs, FOB value of export goods, import intensity of inputs etc.;
v. New tariff items have been introduced in the Schedule pertaining to sectors, viz. sugar confectionary (2 items), chemicals (21 items), pharma (2 items), plastic (7 items), leather articles and footwear (8 items), cotton and manmade fibers/fabrics (4 items), apparels (1 item), footwear (1 item), article of stone (1 item), arms and ammunition (2 items) and furniture (4 items). Description of some of the existing tariff items have been revised for better product differentiation and for enabling tax neutralization for specific products.
vi. Appropriate caps of duty drawback amount have been provided wherever necessary to prescribe upper limit of duty drawback.
vii. ‘Schaeffers Acid’ is currently classified for duty drawback purpose under Tariff Item (TI) 291501. In light of its proper classification under Customs Tariff Heading 2908, a separate entry for ‘Schaeffers Acid’ has been inserted under TI 290801. The duty drawback rate and cap amount for the item remain unchanged. The existing entry for Schaeffers Acid (TI 291501) has been deleted.
3. Based on the representations received from various trade associations and export promotion councils stating that for products consisting of cotton and more than one manmade fibre, drawback was being denied under tariff item 610902- ‘blend containing cotton and manmade fibre’ on the ground that the said heading refers only to “manmade fibre” in singular. In this regard, it has been clarified by the Board that as per section 13 of the General Clauses Act, 1897′- words in singular shall also include plural and vice versa’. In view of this, products containing cotton and more than one manmade fibre are squarely covered by the aforesaid tariff item 610902.
4. All the Customs Brokers & Trade Association are requested to give wide publicity to the contents of this Public Notice among their members in particular and Trade in general.
Signed by A Manimaran
Date: 27-10-2023 18:06:52
Reason: Approved
(A. MANIMARAN)
COMMISSIONER
To:
1. The Chief Commissioner of Customs (CCO), Chennai Customs Zone, Custom House, Chennai-01.
2. The Principal Commissioner/Commissioner of Customs, Import/ ACC/ Preventive/ General/ Airport/ Audit, Custom House, Chennai Customs Zone.
3. All the Additional/Joint Commissioner of Customs, Chennai Customs Zone.
4. All the Deputy/Asst. Commissioner of Customs, Chennai Customs Zone.
5. The Deputy/Asst. Commissioner of Customs (EDI) for publishing it in website.
6. CHS for displaying in Notice Board.
7. Hindi Cell.
Copy to:
1. CCBA, Chennai.
2. General Manager, Federation of Indian Export Organisation (FIEO).
3. All the Traders / Stakeholders.
4. The Correspondence Section.
