- Vendor Duty Drawback
- Flow chart
- The All Industry Rate (AIR)
- The Brand Rate of Duty Drawback
- Imported goods re-exported-Drawback under Sec. 74
- Simplified Scheme of Brand Rate
- Required Documents
- Process flow
As per circular No.14/2003 dated 06.03.2003, Sometimes, various components/ vendor duty drawback items of the export goods, like those in the Automobile Industry are manufactured in the jurisdictions of more than one Central Excise Commissionerate.
In vendor duty drawback such cases, Brand Rate application is required to be filed within the stipulated period in the Headquarters of Central Excise Commissionerate having jurisdiction over the manufacturing unit wherein the finished/ final export goods are manufactured/ assembled.
In vendor duty drawback such cases, the applicant is required to specify the components/ vendor items which are manufactured in the jurisdiction of other Central Excise Commissionerates and submit the requisite data subsequently in the Headquarters of the concerned Commissionerates of Central Excise having jurisdiction over the units wherein such components/ vendor items are manufactured.
Vendor duty drawback the Commissionerate in which the original Brand Rate application has been filed will get the data (pertaining to its Commissionerate) furnished in the application verified and fix the Brand Rate. This Brand Rate may be subsequently revised on the receipt of the Verification Reports in respect of the components/ vendor items from the concerned Central Excise Commissionerates. In the subject claim the Brand rate was filed within the stipulated time.
The Term Duty drawback is applied to a certain amount of duties of Customs and Central Excise, sometimes the whole, sometimes only a part remitted or paid by Government on the exportation of the commodities on which they were levied.
To entitle goods to duty drawback, they must be exported to a foreign port, the object of the relief afforded by the drawback being to enable the goods to be disposed of in the foreign market as if they had never been taxed at all.
For Customs purpose duty drawback means the refund of duty of customs and duty of central excise that are chargeable on imported and indigenous materials used in the manufacture of exported goods.
Goods eligible for duty drawback applies to
a) Export goods imported into India as such;
b) Export goods imported into India after having been taken for use
c) Export goods manufactured / produced out of imported material
d) Export goods manufactured / produced out of indigenous material
e) Export goods manufactured / produced out of imported or and indigenous materials.
The Duty Drawback is of two types:
- All Industry Rate (AIR),
- Brand Rate.
It is essentially an average rate based on the average quantity and value of inputs and duties (both Excise & Customs) borne by them and Service Tax suffered by a particular export product. The All Industry Rates are notified by the Government in the form of a Drawback Schedule every year and the present Schedule covers 2837 entries. The legal framework in this regard is provided under Sections 75 and 76 of the Customs Act, 1962 and the Customs and Central Excise Duties and Service Tax Drawback Rules, 1995.
The All Industry Rate (AIR) of Duty Drawback are notified for a large number of export products every year by the Government after an assessment of average incidence of Customs, Central Excise duties and Service Tax suffered by the export products. The All Industry Rate (AIR) are fixed after extensive discussions with all stake holders viz. Export Promotion Councils, Trade Associations, and individual exporters to solicit relevant data, which includes the data on procurement prices of inputs, indigenous as well as imported, applicable duty rates, consumption ratios and FOB values of export products. Corroborating data is also collected from Central Excise and Customs field formations. This data is analysed and forms the basis for the All Industry Rate (AIR) of Duty Drawback.
The All Industry Rate (AIR) of Duty Drawback is generally fixed as a percentage of FOB price of export product. Caps have been imposed in respect of many export products in order to obviate the possibility of misuse by unscrupulous exporters through over invoicing of the export value.
The scrutiny, sanction and payment of Duty Drawback claims in major Custom Houses is done through the EDI system. The EDI system facilitates credit/disbursal of Drawback directly to the exporter’s bank accounts once the EGM has been filed by respective airlines / shipping lines. The correct filing of EGM is essential for speedy processing and disbursal of Drawback claims.
Notification No. 84/2010-Cus (N.T.), dated 17-9-2010 is relevant for ascertaining the current All Industry Rate (AIR) of Duty Drawback for various export products.
It is allowed in cases where the export product does not have any AIR of Duty Drawback or the same neutralizes less than 4/5th of the duties paid on materials used in the manufacture of export goods. This work is handled by the jurisdictional Commissioners of Customs & Central Excise. Exporters who wish to avail of the Brand Rate of Duty Drawback need to apply for fixation of the rate for their export goods to the jurisdictional Central Excise Commissionerate. The Brand Rate of Duty Drawback is granted in terms of Rules 6 and 7 of the Drawback Rules, 1995.
Where the export product has not been notified in All Industry Rate (AIR) of Duty Drawback or where the exporter considers the All Industry Rate (AIR) of Duty Drawback insufficient to fully neutralize the duties suffered by his export product, he may opt for the Brand Rate of Duty Drawback. Under this scheme, the exporters are compensated by paying the amount of Customs, Central Excise duties and Service Tax incidence actually incurred by the export product. For this purpose, the exporter has to produce documents/proof about the actual quantity of inputs / services utilized in the manufacture of export product along with evidence of payment of duties thereon.
The exporter has to make an application to the Commissioner having jurisdiction over the manufacturing unit, within 3 months from the date of the ‘Let Export’ order. The application should include details of materials/components/input services used in the manufacture of goods and the duties/taxes paid on such materials/ components/input services. The period of 3 months can be extended up to 12 months subject to conditions and payment of requisite fee as provided in the Drawback Rules, 1995.
In terms of Rule 6 of the Drawback Rules, 1995 on receipt of the Brand Rate application, the jurisdictional Commissioner shall verify the details furnished by the exporter and determine the amount/rate of Drawback. Where exporter desires that he may be granted Drawback provisionally, the jurisdictional Commissioner may determine the same, provided the exporter executes a general bond, binding himself to refund the Drawback amount granted to him, if it is found later that the Duty Drawback was either not admissible to him or a lower amount was payable. The Brand Rate letter is thereafter issued to the exporter. The Custom House of the port of export is also given a copy to facilitate payment of Drawback to the exporter.
The Duty Drawback facility on export of duty paid imported goods is available in terms of Sec. 74 (It is discussed in more detail in under mention para) of the Customs Act, 1962. Under this scheme part of the Customs duty paid at the time of import is remitted on export of the imported goods, subject to their identification and adherence to the prescribed procedure.
in case of goods which were earlier imported on the payment of duty and are later sought to be exported within a specified period, Customs Duty paid at the time of import of the goods, with certain cuts, can be claimed as Duty Drawback at the time of export of such goods. Such Duty Drawback is granted in terms of Sec. 74 of the Customs Act, 1962 read with Re-export of Imported Goods (Drawback of Customs Duty) Rules, 1995. For this purpose, the identity of export goods is cross verified with the particulars furnished at the time of import of such goods.
Where the goods are not put into use after import, 98% of Duty Drawback is admissible under Sec. 74 of the Customs Act, 1962. In cases the goods have been put into use after import, Duty Drawback is granted on a sliding scale basis depending upon the extent of use of the goods. No Duty Drawback is available if the goods are exported 18 months after import. Application for Duty Drawback is required to be made within 3 months from the date of export of goods, which can be extended up to 12 months subject to conditions and payment of requisite fee as provided in the Drawback Rules, 1995.
Under Brand Rate of Duty Drawback Scheme, a “Simplified Scheme” is also available to limited companies and registered partnership firms.
Under this Scheme, a rate letter for duty drawback is issued prior to receipt of verification report from the jurisdictional Central Excise Authorities on the basis of application made by the exporter subject to certain certification etc.
For this purpose, besides application in the prescribed format along with enclosures, the exporter is also required to submit Chartered Accountant/Chartered Engineer’s certificate about the authenticity of consumption pattern and duty payments as claimed.
An indemnity bond undertaking to pay back the duty drawback being claimed by him if it is found later on verification that the drawback amount paid to him is in excess of the admissible amount, has also to be furnished.
In all cases where duty drawback is paid under Simplified Scheme, after receipt of the verification report from jurisdictional Central Excise Authority, the veracity of the application is counter checked with the said verification report and recovery action taken, where ever found necessary.
- Shipping Bill
- Bill of Entry
- Bill of Materials
- DBK Statement
- DBK Application
- CA certificate
- CE Certificate
Verification: – Verify the claim in concern jurisdiction office, company visit, getting the verification Report.
Fixation: Getting the Brand Rate letter In Brand Rate Fixation Cell.
Realization: – Processing the Shipping Bill in Drawback Department.
|Claim need to file,
Our processing time: 60 days
- When GST Refund Can Be Claimed?
- Time Limit for Filing GST Refund Request
Processing of timely GST refunds will help businesses and facilitate trade through the release of blocked working capital funds.
Under GST, the GST Council created a standardized system to process GST refund claims in a simple procedure for the taxpayers.
The entire GST refund claim and processing are done online on the GST Portal.
In this article, we look at when the GST refund can be claimed by taxpayers.
- Export of goods or services.
- Supplies to SEZs units and developers.
- Deemed exports.
- Refund of taxes on purchase made by UN or embassies etc.
- Refund arising on account of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court.
- Refund of accumulated Input Tax Credit on account of inverted duty structure other than Nil rated or fully exempt supplies.
- GST refund for sez supplies
- Finalisation of provisional assessment.
- Refund of pre-deposit.
- Excess payment due to mistake.
- Export of services under GST.
- Refunds to International tourists of GST paid on goods in India and carried abroad at the time of their departure from India.
- Refund on account of issuance of refund vouchers for taxes paid on advances against which, goods or services have not been supplied.
- Refund of CGST & SGST paid by treating the supply as intra-State supply which is subsequently held as inter-State supply and vice versa.
Under GST, the applicant should file GST refund claims within 2 years from the relevant date.
GST refund if the claim is in order, the refund has to be sanctioned within a period of 60 days from the date of receipt of the claim.
In GST refund Interest on the withheld refund shall apply at the rate of 6%. An interest rate of 9% per annum shall apply on the delayed refund (beyond 60 days, arising from the order of authority / court).
- Eligibility to Scheme
- Benefits of Scheme
- How we can help you
- List of documents required for the SEIS Scheme
- Benefit linked to Net Foreign Exchange Earnings For Individual and Sole Proprietorship= $10,000 FY For Others = $15,000 in preceding FY.
- Service provider shall have an active IEC at the time of rendering such services.
- Export turnover of EOU/ STPI/ BTP/ EHTP unit or supplies made to such units as well as clubbing of turnover above units with turnover of DTA units.
- Payments received from EEFC account in free foreign exchange will not eligible.
- SEPC RCMC – Registration.
- Duty credit scrip equivalent to 3% or 5% of Net Free Foreign Exchange earned.
- Scrip’s can be used for payment of Custom Duty / Excise Duty / Service Tax for procurement of goods or services relevant to the business of the applicant
- Service providers also engaged in manufacturing activity can use the SFIS scrip for importing / domestic sourcing of capital goods including spares for manufacturing.
- Duty Credit Scrip are freely transferable.
- Debits made from the scrip eligible for Cenvat-credit (ITC) or Drawback.
- Scripts shall remain valid for 18 month for use from the date of issue by RA.
(Net Foreign Exchange) = (Gross Earnings of Foreign Exchange) – (Total expenses / payment / remittances of Foreign Exchange by the IEC holder, relating to service sector in the Financial year.)
- Determination of eligibility for the benefit under this scheme.
- This is the most important part of this scheme. Any mistake at this stage will render all the efforts futile. We’ll understand your services in detail and will arrive at the eligibility criteria including the rate at which duty credit scrip will be issued. If there is any shortcoming in your eligibility criteria which can be migrated, we’ll advise you on that.
- Preparation of application with complete paperwork.
- Our services is not limited to consultation part only. Our team of experts will prepare the application for availing this benefit completely as per the required guidelines so that there is no back and forth at the time of review of application by the concerned department.
- Co-ordination with Department to get the Duty Credit Scrip issued.
- Once the application is filed, it would require regular co-ordination with the concerned department to expedite the matter.
- Help in selling the Duty Credit Scrip if the exporter doesn’t want to use it.
- In case, you are not able to utilize the full or part of the duty credit scrip, we’ll help you to sell it to a potential buyer in the market which will convert the benefits in free funds.
- Importer Exporter Code (IEC Code)
- Application form ANF-3B (Aayat Niryat Form)
- CA Certificate
- Statement showing the nexus between Invoices and FIRC’s (Table No 4)
- Write up of Services
- Self–Certified copy of invoice and FIRC’s
- DGFT Digital Signature Certificate (DSC)
- RCMC Copy
- Necessary Declarations
- RoDTEP Scheme
- Procedure For RoDTEP Scheme
RoDTEP (Remission of Duties or Taxes on Export Products) is a Scheme for the Exporters to make Indian products cost-competitive and create a level playing field for them in the Global Market.
RoDTEP Scheme will replace the current MEIS scheme, which is not in compliance with WTO norms and rules.
The new RoDTEP Scheme is fully WTO compliant scheme. It will reimburse all the taxes/duties/levies being charged at the Central/State/Local level which are not currently refunded under any of the existing schemes but are incurred at the manufacturing and distribution process.
Below is a diagram showing the history of export promotion schemes, for a better understanding of their evolution.
Currently, only the GST and the import customs duties levied on inputs required for the manufacturing of export products are either exempted or refunded in some or the
Input tax credit (ITC) of GST paid is available, and also if exported on payment of duty then IGST refund can be claimed.
Import Custom duties on raw materials are exempted through the Advance Authorization scheme or refunded through the Duty Drawback scheme.
However, still, there are many duties and taxes levied by the Central and State Government which are not refunded. It adds up to the final cost of resultant products
and makes Indian products uncompetitive in the global market.
The new RoDTEP Scheme is similar to the existing RoSCTL Scheme (Rebate of State and Central Taxes and levies), or we can also say that RoSCTL is the earlier version of RoDTEP.
The existing RoSCTL Scheme is only for the made-ups & apparel sectors.
The application will be made under RoDTEP as we are doing for RoSCTL.
An application shall be filed online using Class 3 Individual type Digital signature Certificate on ICEGate website (https://www.icegate.gov.in/).
Relevant Shipping bills shall be linked with the online application by the Exporter/Applicant.
The refund under RoDTEP Scheme would be in the form of duty credit which will be transferable, or it may be in the form of electronic scrip which will be maintained in the electronic ledger.
The implementation of the process will be done with the help of end to end digitization.
- SAD Refund
- AEO Certificate
- SVB finalization
- All Custom & GST Related work
- Inverted duty refund
- ITC accumulation refund
- How to get the accumulated GST refund
- LUT REFUND
- GST refund for SEZ suppliers
- Export of service under GST
- IGST refund pending
Special Additional Duty refund can be claimed by importers trader who imported goods into India and sold them as it is i.e. goods didn’t lose their identity.
In nutshell, importer trader is allowed to claim Special Additional Duty Refund only after sale of imported goods on which central sales tax (CST) or Value Added Tax (VAT) amount has been paid already.
Refund is not available to manufacturers who consume these goods in manufacturing process or end consumers of goods.
The abbreviation AEO stands for “Authorised Economic Operator.”
It is a status granted to an economic operator as a concept that is based on the partnership between customs and business.
The AEO is used to determine a reliable and trust-worthiness of the economic operator.
Special Valuation Branch is a Branch of the Custom House, specializing in investigating the transactions involving relationship between the supplier and the importer and certain other special features like Technical Collaboration between the parties, etc.
Special Valuation Branch examines the influence of relationship on the invoice value of the imported goods in respect of transactions between related parties.
In respect of Technical Collaboration Agreements and Joint Venture Agreements, the terms and conditions of these agreements are examined to arrive at the conclusion, whether the existence of such agreement has influenced the invoice value of the imports.
An inverted duty refund is a process of getting an accumulated fund on tax. When a customer buys raw material for high GST and sells its finished good for a low GST amount. In this case, the customer can get an inverted duty refund under GST. Many processes take place while filing the inverted duty refund form under GST. AFS is a leader in filing inverted duty refunds without errors.
The taxpayers have the right to get their accumulated ITC refund. For an ITC accumulation refund, the taxpayer should be eligible to fill the RDF-01 form under the GST portal. The taxpayer should do this ITC accumulation refund process within two years. AFS helps in do all the formalities included in the ITC accumulation refund.
Accumulation of GST credit will happen when the tax paid on raw materials is more than tha output finished product. To get the accumulated GST refund, the taxpayer should fill the RDF-01 form without errors. AFS will help out to get the accumulated GST refund. To get the accumulated GST refund taxpayer should have an invoice statement with the date, time, and shipment details.
AFS helps customers to export their goods without payment of tax under the method of LUT refund. Entrepreneurs may face difficulties while filing the RFD-11 application. It includes many formalities and needs perfect data for the approval of the LUT refund registration under GST. This Letter of Undertaking method remains from the traditional days. But, many entrepreneurs unused the LUT because of a lack of knowledge and headache procedures while registering. AFS is glad to help customers to solve their issues and extend their revenue.
AFS focuses on increasing the growth of economics by helping SEZ suppliers with GST refunds. GST refund for SEZ suppliers customer must be eligible to file RFD-01 form under CGST rules. There are a lot of benefits to extending investors in the Special Economic Zone. It will increase employment opportunities as well as the economic growth of the country. Customers will face an exceedingly challenging process while GST refund for SEZ suppliers. AFS will take this pressure from customers and help to process the GST refund for SEZ suppliers.
Export of service under GST is the process of trading goods or services from a home state to another state or country. AFS will help clients with the registration of export of service under GST. We will take care of all the processes while registering the export of service under GST. AFS feels happy to make our customer’s businesses fly without boundaries by registering their export service under GST.
AFS has appreciable potential in solving the issue of the IGST refund pending. IGST refund paid on goods is a trouble-free process. However, while this process of IGST refund, many applicants find it is in the pending stage. IGST refund pending will occur for technical reasons that are a common issue faced by many customers. People find it difficult to solve this problem. AFS delighted to provide the solution for this IGST refund pending.
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