Duty Drawback is a scheme which provides refund of duties paid on raw material and inputs that have used in production of goods for exports.
Duty Drawbacks is allowable under Section 74 & Section 75 of the Customs Act, 1962.
Section 74 allows duty drawback on re-export of duty-paid goods. The drawback shall be 98% of such duty and the goods should be entered for export within two years from the date of payment of duty on the importation.
Section 75 allows duty drawback on imported materials used in the manufacture of goods which are exported.
These are given on the following basis
- All Industry Rate- exporters covered under this drawback schedule can get the drawback at the prescribed rates for the customs of port of export.
- Brand Rate- if exporters not covered under the drawback schedule, they can file for drawback under brand rate of fixation to recover the duties actually suffered in the process.
- Special Brand Rates- can be fixed in case the All Industry rates are available but is less than 4/5th of the actual duty suffered.