Circular No. 23/2003-Cus
1st April, 2003

F.No.609/40/2003-DBK
Government of India
Ministry of Finance & Company Affairs
Department of Revenue

Sub: All Industry Rates of Duty Drawback, 2003-2004 -reg.

The Ministry has announced the revised All Industry Rates of Duty Drawback for the year 2003-2004 vide notification no.26/2003-Cus (N.T.) dated 1.4.2003. These rates shall come into effect from 7.4.2003. Thus the existing rates shall remain in force till 6.4.2003.

2. The salient features of the revised rates are as follows:-

  • This year, drawback rate for Chassis of motor vehicles has been fixed vide SS No. 87.43 on the basis of data furnished by the Engineering Export Promotion Council (EEPC).
  • Drawback rates in respect of 401 entries have been continued at the existing level as there is no change in the duties on the inputs used in the export products.
  • In respect of 403 entries, drawback rates have been reduced consequent upon reduction in Customs and Central excise duties.
  • Since the customs duty rates on various inputs used in Leather Industry have remained unchanged, the rates of finished and lining leather, various leather articles and leather footwear falling under Chapters 41, 42, and 64 of the Drawback Table have been maintained at last year’s level. Few notes have been added in Chapter 42 to clarify the scope of industrial leather gloves and for classification of leather goods having usage of cotton/synthetic materials.
  • In respect of handloom textiles/made-ups, made of cotton, the duty drawback rates have not been changed owing to the retention of central excise duty on Cotton hank Yarn imposed last year. However, due to reduction in duty on man-made fibres, new entries have been created for handloom made-ups made of man-made fibres/fabrics with lower drawback rates.
  • Due to reduction in Central Excise duties on man-made fibres and their fabrics, the drawback rates have been reduced for Knitted garments/ Knitwears and Woven Garments.
  • On account of reduction in the duties of Customs and Central Excise, drawback rates of woolen/silk/synthetic carpets have been reduced.
  • The drawback rates of Copper/ Brass Artwares /Handicrafts /Hardware have not been altered due to the continuation of earlier customs duty rates in respect of main raw materials.
  • A note has been added under SS No.87.44 specifying the inputs which have been taken into consideration while formulating the duty drawback rate for complete bicycle. This shall enlighten the field officers to permit drawback on the accessories which the exporters may export along with the complete bicycles.
  • Consequent upon the recommendations of the Kelkar Committee, relaxation has been provided in the exports of composite articles. The General Note 11 to the new Drawback Table shall enable the exporters to avail drawback on the strength of a declaration only. The field officers would be permitted to cause verifications in cases of doubt or information only.

3. In the wake of amendment in the Customs Act, the supplies made to the special economic zone are now treated at par with the physical exports. Consequently, rule 2 ( c) of the Customs and Central Excise Duties Drawback Rules,1995, have been amended. Accordingly, the exports to special economic zone shall be eligible for drawback at the rates specified in the Duty Drawback Table.

4. All the staff concerned may be advised to go through the changes effected in the All Industry Rates meticulously. Though all care has been taken while formulating /publishing the rates, the possibility of errors/omissions due to inadvertence cannot be ruled out. It is requested that any error/omission noticed during the implementation of the rates may be brought to the notice of the Department at the earliest for suitable corrective action.

5. Suitable public notices for information of the Trade and standing orders for guidance of the staff may kindly be issued accordingly.

6. The receipt of this Circular may kindly be acknowledged.

S.S. Renjhen
Joint Secretary to the Government of India

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