CBIC must clarify on non-duty paid inputs for drawback

The Central Board of Indirect Taxes and Customs (CBIC) has asked the Customs field formations to follow scrupulously the clarification through no.19/2005-Cus dated May 21, 2005, regarding admissibility of drawback on export products its circular manufactured from non-duty paid inputs.

- TNC RAJAGOPALAN

Still, it would help if the CBIC clarifies a related point. Section 75(1) of the Customs Act, 1962, allows drawback of the Customs and Central Excise paid on the inputs used in the manufacture or processing of the export products.

The government has notified the Customs and Central Excise Duties Drawback Rules, 2017, to carry out the provisions of the said Section 75(1). Rule 3 of the said rules empowers the government to notify the rates, known as All Industry Rates (AIR), at which drawback is granted on export of certain items. For items that are not covered under the AIR notification, the actual duty incidence can be claimed under Rule 6. Where the actual duty incidence is more than the notified AIR, drawback can be claimed under Rule 7 of the said Rules.