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Circular No. 29/2015-Customs
F.
No. 609/98/2015-DBK Government
of India Ministry
of Finance, Department of Revenue Central
Board of Excise & Customs
New
Delhi, dated 16th November, 2015 To Principal Chief
Commissioners / Chief Commissioners (All under CBEC) Principal Directors
General / Directors General (All under CBEC) Principal
Commissioners/Commissioners (All under CBEC)
Subject: All Industry
Rates of Duty Drawback and other Duty Drawback related changes - reg.
Madam/Sir,
The revised All
Industry Rates (AIR) of Duty Drawback has been notified vide
Notification No. 110/2015-Customs (N.T.), dated 16.11.2015 which
comes into force on 23.11.2015. These AIRs broadly take into
account certain broad average parameters including, inter alia,
prevailing prices of inputs, input output norms, share of imports in
input consumption, the rates of central excise and customs duties,
the factoring of incidence of service tax paid on taxable services
which are used as input services in the manufacturing or processing
of export goods, factoring incidence of duty on HSD/furnace oil,
value of export goods, etc.
2. The notification may
be downloaded from Boards website and carefully perused for
details of the changes. However, some of the changes are highlighted
below
(a) The composite rates
have been increased in many cases like frozen shrimps/ prawns (chp
3, 16), perfumed agarbatti (chp 33), finished/ lining leather (chp
41), leather hand bags/ wallet/ belts (chp 42), industrial gloves
(chp 42), certain MMF yarn/ fabric (chp 54, 55), readymade garment
made of cotton, wool & cotton with lycra (chp 61, 62), made-ups
of cotton/ MMF (chp 63), hand tools (chp 82), etc.
(b)Separate entries
have been provided in the Drawback Schedule for Accelerated Freeze
Dried (AFD) shrimps, lobster/crab, pasteurized tinned chilled crab
meat (chp 3, 16), fish oil (chp 15), fish meal (chp 23), potassium
chlorate (chp 28), leather carpets (chp 42), polypropylene mats (chp
46), cotton yarn of 100 or more counts (chp 52), belting fabrics
(chp 54), filtration fabric made of polyester filament yarn/
polypropylene filament yarn/ polybutylene terephthalate (chp 54),
suits, jackets & trousers (chp 61 & chp 62)- by trifurcating
existing single entry, protective industrial wear made of aramid
fibre/ modacrylic fibre/ cotton fibre (chp 62), glass art-ware/
handicrafts with silver coating (chp 70), aluminium conductor steel
reinforced (chp 76), turbo charger (chp 84), tractor parts (chp 87),
self-loading or self-unloading trailers and semi-trailers of a type
used for agricultural purposes (chp 87), leg guards (chp 95).
(c) Rate has been
provided for granulated slag (chp 26) and the description under
heading 6802 has been reworded with respect to constituent material
for tiles, handicrafts, etc.
(d) Certain products
earlier having only customs rates, have been provided with composite
rates. These include bicycle tyres (chp 40), bicycle tubes (chp
40), woven fabrics of other vegetable textile fibres/ woven fabrics
of paper yarn (chp 53), headgear (chp 65), umbrellas/walking sticks
etc. (chp 66), artificial flowers etc. (chp 67), acrylic blankets
(chp 63).
(e) Iron and steel (chp
72 from heading 7207 onwards), articles of iron and steel (chp 73),
tools and parts of base metal (chp 82), miscellaneous articles made
from steel (chp 83), machinery and appliances (chp 84), electrical
machinery (chp 85), rolling stock (chp 86) and ships (chp 89) have
been provided with increased customs rate of 2%, with certain
exceptions.
(f) Composite rates for
wooden art ware (chp 44), papier mache (chp 48), yarn/ fabric/
garment of silk (chp 50, 61, 62), certain MMF yarn/ fabric (chp 54,
55), carpets (chp 57), brass artware/ articles (chp 74), certain
sports goods (chp 95) etc. see a reduction.
(g) AIR has been fixed
as Rs. 209.3/gm for gold jewellery /parts and Rs. 2790/kg for silver
jewellery /articles.
(h) Rates on remaining
of the erstwhile DEPB items are being aligned with residuary rates,
except where higher rates were due.
(i) Drawback caps,
wherever meaningfully possible, have been provided normally in
entries with rates higher than 1.9% (the highest residuary rate). It
may be noted that the drawback cap of the nature provided for
certain project exports applies when the conditions specified in the
relevant Notes and conditions are met and it does not apply to other
cases.
2. The
Customs, Central Excise and Service Tax Drawback Rules, 1995 have
also been amended vide Notification No. 109/2015-Customs (N.T.)
dated. 16.11.2015 effective from 23.11.2015. This notification may
also be perused. The first of these amendments enables exporters of
wheat to function under the brand rate mechanism. The second
change relates to payment of provisional drawback in certain cases of
export under claim for brand rate. Presently, after export, a
complete application for determination of brand under rule 7 of these
Rules has to be filed at the Central Excise office to enable issuance
of provisional drawback letter. The sub-rule (3) of Rule 7 has been
amended so that Central Government may specify an amount for payment
as provisional drawback by proper officer of Customs. Notification
No. 110/2015-Customs (N.T.), dated 16.11.2015 (paragraph 3) specifies
this amount as equivalent to the Customs component of AIR
corresponding to the export goods, if applicable, and subject to the
same conditions as applicable to a claim for the B column in
the Schedule. The modified procedure for export under claim for
brand rate under rule 7 of Drawback Rules 1995 is at Annexure 1.
The amount paid as provisional drawback under the above dispensation
shall be taken into account by the Central Excise to authorize
further provisional drawback, where necessary. The brand rate
facilitation in terms of Paras 5A-5C of Instruction No.
603/01/2011-DBK dated 11.10.2013 would continue and there should be
no delay by Central Excise formations in finalizing applications for
fixation of brand rate.
3. The Commissioners are
expected to ensure due diligence to prevent any misuse. The shipping
bills with parameters considered to be sensitive should be handled
with adequate care at the time of export itself. Further, in case of
claim of the composite (higher) rate of AIR, the processing should
specifically ensure availability of Non-availment of Cenvat
certificate etc. at the export stage itself. There is also need
for continued scrutiny for preventing any excess drawback arising
from mismatch of declarations made in the Item Details and the
Drawback Details in a shipping bill. It may continue to be ensured
that exporters do not avail of the refund of service tax paid on
taxable services which are used as input services in the
manufacturing or processing of export goods through any other
mechanism while claiming AIR.
4. Suitable
public notice and standing order should be issued for guidance of the
trade and officers. Any inconsistency, error or difficulty faced
should be intimated to the Board. Details may be informed in case of
any specific product on which the new Schedule has resulted in
removal of drawback cap which is accompanied by an increase in the
relative drawback amount per unit of product.
Enclosure:
Annexure 1
(Rajiv
Talwar) Joint
Secretary to the Government of India ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Annexure
1
Procedure for export
under claim for brand rate under Rule 7 of Drawback Rules
1. The
exporters opting for claim of brand rate under rule 6 the Customs,
Central Excise Duties and Service Tax Drawback Rules, 1995 shall
continue to declare the figure 9801 as an identifier under the
Drawback details in the shipping bills filed.
2. For
shipping bills filed on or after 23.11.2015, the exporters opting for
claim of brand rate under rule 7 of Drawback Rules, 1995 shall
declare the figure 9807 (instead of 9801) as an
identifier in the shipping bill under the Drawback details.
Immediately after the said identifier, the tariff item number of
goods as shown in column (1) of the Schedule shall be declared
followed by the character B. For example, if Tractors (other
than tractors of heading 8709) are exported under claim for brand
rate under rule 7 and the related Drawback Tariff Item number for
such tractors in the AIR Schedule is 8701, the declaration on the
shipping bill would be 98078701B. Similarly, for Bicycle
pump the related Drawback Tariff Item number in the AIR Schedule
is 841403 and the declaration on the shipping bill would be
9807841403B. Such a shipping bill is to be processed by the
Customs for payment of provisional drawback amount equivalent to the
Customs component (B column of AIR Schedule consisting of rate
and cap) for the said declared Drawback TI of AIR Schedule. This
processing is subject to same conditions as applicable to AIR
drawback wherein there is claim for only Customs component. Suitable
change in EDI is being implemented by DG (Systems).
3.1 After
goods are exported, the exporter may apply to the relevant Central
Excise office for fixation of brand rate under rule 7. In case of a
timely filed complete application for fixation of brand rate under
rule 7, subsequent drawback payments may arise against such shipping
bill on account of provisional brand rate letter issued by Central
Excise in terms of para 5A-5B of Instruction No.603/01/2011-DBK dated
11.10.2013 and/or the final brand rate letter and here the above said
provisional drawback amount already paid shall also be taken into
account.
3.2 However,
in case of a timely filed complete application for fixation of brand
rate under rule 7, if the brand rate request is denied after
verification, the rejection letter issued by Central Excise and
endorsed to the Customs formation should carry the information about
the details of the eligibility for the rate and cap specified in A
column of AIR Schedule in terms of all the Notes and Conditions with
the Schedule and on this basis the Customs shall update the record
and after taking into account the payments already made, finalise the
claim in terms of the AIR provisions.
3.3 It
may be noted that only the first drawback amount processed through
the EDI system is electronically validated with respect to Rule 8A of
Drawback Rules, 1995. Therefore, wherever there is any subsequent EDI
processing on basis of the AIR, this validation must be enforced by
the Customs officer for the total drawback amount against relevant
tariff item.
4. For
shipping bills filed before 23.11.2015, the exporters opting for
claim of brand rate under rule 7 of the Drawback Rules, 1995 would,
as before, have declared the figure 9801 as an identifier in
the shipping bill under the Drawback details. In such cases, if the
Let Export Order date is to be on or after 23.11.2015, the exporter
shall be facilitated to amend, prior to the actual LEO, the
identifier along the lines mentioned in item 2 above. However, even
if the LEO occurs on or after 23.11.2015 without such amendment, the
exporter may provide the information to the Asst/Dy. Commissioner of
Customs at the port of export that the option for claim of brand rate
reflected in the shipping bill was intended to be under rule 7 of the
Drawback Rules, 1995 and also indicate the Tariff Item number (as
shown in column (1) of the AIR Schedule) corresponding to the export
goods (exported in the shipping bill) and seek provisional drawback
amount equivalent to the Customs component. The Customs shall enter
this information in its records along with details of the calculation
of the amount. The payment of the provisional drawback amount shall
be processed with conditions as applicable to AIR drawback wherein
there is claim for only the Customs component.
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