Central Board of Indirect Taxes & Customs (CBIC) has issued Instruction No. 01/2025 – Customs on February 28, 2025, addressing concerns regarding the denial or reduction of All Industry Rate (AIR) of duty drawback for export goods manufactured using some non-duty paid or concessional duty inputs. Referring to Board Circular No. 19/2005 – Customs, CBIC reiterates that AIR rates are determined based on the average duty paid on inputs, considering a weighted average consumption of imported and indigenous materials across exporters. It is clarified that field formations are not permitted to investigate whether exempted inputs were used in the production of exported goods. CBIC directs authorities to issue standing orders ensuring strict compliance with the 2005 circular. Any operational challenges should be reported to the Board.
F. No. 609/13/2004-DBK(Pt-I)
Government of India
Ministry of Finance,
Department of Revenue,
Central Board of Indirect Taxes & Customs,
Drawback Division
Instruction No. 01/2025 -Customs | Dated: 28th February 2025
To
All Principal Chief Commissioners/Chief Commissioners of Customs/Customs (Preventive)/Customs & Central Taxes.
All Principal Commissioners/Commissioners of Customs/Customs(Preventive).
All Pr. Directors General/Director Generals under CBIC.
Sub: – Admissibility of AIR of duty drawback on export goods manufactured from inputs, some of which are non-duty paid — reg.
Madam/Sir,
It has been brought to the notice of the board that All Industry Rate of duty drawback is being denied or reduced on export goods using inputs some of which are not duty paid or are paid at concessional rate of duty.
2. In this regard, attention is invited to Board Circular No. 19/2005- Customs dated 21.03.2005 issued vide F. No. 609/13/2004-Dbk on the above subject matter wherein it was clarified that the concept of AIR of duty drawback is that the rates are determined taking into account the average duties paid on the inputs and in determining the rates, the average (weighted average) consumption of imported / indigenous inputs of a representative cross- section of exporters is taken into account and it is not open to the field formations to probe whether certain exempted inputs have been used in the manufacture of the export goods.
3. Suitable standing order may be issued to instruct the staff to follow the clarification issued under Board Circular No. 19/2005- Customs dated 21.03.2005 scrupulously.
4. The difficulties, if any, may be brought to the notice of the Board.
Hindi version follows.
Encl: as above.
Yours faithfully,
(Mahendra Singh Gurjar)
OSD (Drawback Division),
CBIC, New Delhi
