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DUTY DRAWBACK
SCHEME
DUTY DRAWBACK
SCHEME
THE DUTY DRAWBACK SCHEME
PROVIDES EXPORTERS A REFUND OF
CUSTOMS DUTY PAID ON UNUSED
IMPORTED GOODS, PROCESSED OR
INCORPORATED INTO OTHER GOODS
FOR EXPORT.
THE ELIGIBILITY IS YOU MUST BE THE
LEGAL OWNER OF THE GOODS WHEN
GOODS ARE EXPORTED.
ALL INDUSTRY RATE (AIR) OF DUTY
DRAWBACK:
• The AIR of Duty Drawback are large number of export products every
year by the Government.
• The AIR are fixed after extensive discussions with all stake holders viz.
• The AIR of Duty Drawback is generally fixed as a percentage of FOB
price of export product.
• EDI system facilitates credit\disbursal of Drawbacks directly to
exporter’s bank account .
BRAND RATE OF DUTY DRAWBACK:
• The export has not been notified in AIR of duty drawback or

where the exporter considers the insufficient to fully
neutralize the duties suffered .
• Exporter has to make an application to the commissioner.
• In terms of rule 6 the Drawback rules ,1995 receipt of brand
rate application has to verify the details furnished by the
exporter.
SECTION 74 DRAWBACKS:
• In case of goods which are earlier imported on payment of

duty can be claimed as duty drawback.
• Act, 1962 read with re-export of imported goods.
• The goods are not put into use after import, 98% of duty
drawbacks under section 74.
• No duty drawbacks is available if the goods are exported 18
month after import.
SUPPLEMENTARY CLAIMS OF DUTY
DRAWBACKS
• Where the rate of duty drawback is determined or revised under
rules 3 or 4 of the drawback rules,1995 from the date of such rate
in the official Gazette.
• Where the rate of duty drawbacks is determined or revised upward
under rules 6 or 7 of the drawback rules 1995, from the date of
communicating the said rate to the person concerned.
• In all other cases, from the date of payment or settlement of the
original duty drawbacks claim by the proper officer.
PROCEDURE FOR CLAIMING DUTY
DRAWBACKS
The Duty Drawback on export goods AIR Brand Rate is to be
claimed at the time export and prescribed format of shipping
bill\bill of export under drawback.
Shipping bill itself is treated as the claim for drawback.
If the document are not furnished or there is any deficiency the
maybe returned.
The export shipment , however , will not be stopped for this
reasons.
LIMITATION ON ADMISSIBLITY
OF DUTY DRAWBACK
• The customs Act, 1962 lays down certain limitations and conditions
• The Duty Drawback amount is less than Rs.50/-.
• The Duty Drawback amount exceeds one third of the market price of
the export product.
• The Duty Drawback amount is less than 1% of FOB value per shipment
exceeds Rs.500/-.
• In case of export smuggled back the government can take under section
76 .
Duty Exemption
Scheme
Advance Authorization Scheme
Under this scheme, duty free import of inputs are
allowed, that are physically incorporated in the
export product (after making normal allowance for
wastage) with minimum 15% value addition.
Advance Authorization (AA) is issued for inputs in
relation to resultant products as per SION or on the
basis of self declaration, as per procedures of FTP.
AA normally have a validity period of 12 months
for the purpose of making imports and a period of
18 months for fulfillment of Export Obligation (EO)
from the date of issue. AA is issued either to a
manufacturer exporter or merchant exporter tied
to a supporting manufacturer(s).
Advance Authorization for annual requirement
Exporters having past export performance (in at
least preceding two financial years) shall be
entitled for Advance Authorization for Annual
requirement. This shall only be issued for items
having SION.
Duty Free Import Authorization (DFIA) Scheme
DFIA is issued to allow duty free import of inputs,
with a minimum value addition requirement of
20%. DFIA shall be issued on post export basis for
products for which SION has been notified.
Separate schemes exist for gems and jewellery
sector for which FTP may be referred.
Duty Drawback of Customs/Central Excise Duties/Service Tax
The scheme is administered by Department of
Revenue. Under this scheme products made out of
duty paid inputs are first exported and thereafter
refund of duty is claimed in two ways: i) All
Industry Rates : As per Schedule
ii) Brand Rate : As per application on the basis of
data/documents
Rebate of Service tax through all industry rates
Refund of service tax paid on specified output
services used for export of goods is available at
specified all industry rates.
Duty Remission
scheme
Duty Remission scheme consist of;
A.Duty Free Replenishment
Certificate Scheme and
B.Duty Entitlement Passbook Scheme
A. DUTY FREE REPLENISHMENT
CERTIFICATE (DFRC) SCHEME
• DFRC Scheme was announced on 01.04.2000 under the EXIM

Policy 1997-2002.
• DFRC is issued to a merchant exporter or manufacturer
exporter for the import of inputs used in the manufacture of
goods without payment of basic customs duty.
• DFRC shall be issued on minimum value addition of 25%
except for items in gems and jewellery sector.
• Export products covered under the SION are
eligible for DRFC.
• The validity of such licences is normally 18
months.
• DFRC materials imported against it are freely
transferable.
B. DUTY ENTITLEMENT PASS
BOOK (DEPB) SCHEME
• It is an export incentive scheme of India government

provided to exporters in India
• It is issued after export, at a predetermined credit on the FOB
value.
• Thus the exporter is eligible to claim credit as a specified
percentage of value of exported product.
• The credit amount is entitled only to be adjusted to the
amount to be paid as customs duty.
• Under this scheme an exporter may apply for
credit as specified percentage of FOB value of
export.
• The items imported against it are freely
transferable.
• The exports under the DEPB Scheme shall not
be entitled for drawback, however the
additional customs duty paid in cash or through
debit under DEPB shall be adjusted as CENVAT
credit duty / duty drawbacks.
WHAT IS EPCG SCHEME
 IT IS A SCHEME TO PROMOTE EXPORT FROM INDIA.
 LAUNCHED BY DGFT IN THE FOREIGN TRADE POLICY 2015-2020 W.E.F 1ST APRIL
2015
 IT FACILITATES IMPORT OF CAPITAL GOODS FOR MANUFACTURING QUALITY
PRODUCTS AND TO ENHANCE THE INDIA’S EXPORT AND MANUFACTURING
COMPETITIVENESS.
THE SCHEME ENABLES THE IMPORT OF CAPITAL GOODS AT NIL/ CONCESSIONAL
RATE OF DUTY.
 THE SCHEME IS APPLICABLE ONLY FOR CAPITAL GOODS IMPORTED & USED IN
MANUFACTURING GOODS TO BE EXPORTED FROM INDIA.
WHAT ARE THE CAPITAL GOODS ALLOWED UNDER
THE SCHEME?
• Plant, machinery, equipment or accessories required for manufacture or production, either directly or
indirectly, of goods or for rendering services, including those required for replacement, modernisation,
technological upgradation or expansion.
• Packaging machinery and equipment
• Refractories for initial lining
• Refrigeration equipment
• Power generating sets
• Machine tools
• Catalysts for initial charge
• Equipment and instruments for testing, research and development, quality and pollution control.
• Capital goods used in manufacturing, mining, agriculture, aquaculture, animal husbandry, floriculture,
horticulture, pisciculture, poultry, sericulture and viticulture as well as those used in services sector.
• Computer software systems
• Spares, moulds, dies, jigs, fixtures
• Catalysts for initial charge plus one subsequent charge

WHO ALL ARE COVERD UNDER THIS SCHEME?
 Manufacturer exporters with or without supporting

manufacturers
 Merchant exporters tied to supporting manufacturers.
Service providers including common service providers.
Importers of capital goods for manufacturing goods for
domestic sale are not covered.
HOW TO OBTAIN AN EPCG LICENSE?
• An application should be submitted to the licensing authority of
Director General of Foreign Trade(DGFT) along with the required
documents.
• The application should have the complete details of the company
and applicant.
• An online application in Form ANF 5A is filed online at dgft.gov.in
using digital signature with the Company and personal details.
• Validity of EPCG authorization is 18 months.
• Extension or revalidation is not permitted.
DOCUMENTS REQUIRED FOR EPCG
LICENSE
ANF 5B is to be filled along with Self-certified copies of the following:
• Import Export Code (IEC)
• Registration cum Membership Certificate (RCMC)
• Digital signature
• Registration certificate from Tourism Department
• Pan Card
• Excise Registration (if registered)
• GST Registration Certificate
• Proforma Invoice
• Brochure
• Self-Certified Copy + Original of Certificate of Chartered Accountant
• Self-Certified Copy + Original of Certificate of Chartered Engineer

WHAT IS THE EXPORT OBLIGATION UNDER
THE SCHEME?
• To export goods of value equal to six times of duty saved.

• Time limit - within six years from the date, the EPCG
authorization is issued .
• On non- compliance, customs duty along with prescribed
interest(15%) is to be paid by the importer.
• No extension of time will be given except for exceptional cases
with sufficient proof of non-controllable factors causing delay by
the importer.

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DUTY DRAWBACK

• The export has not been notified in AIR of duty drawback or

• In case of goods which are earlier imported on payment of

• DFRC Scheme was announced on 01.04.2000 under the EXIM

• It is an export incentive scheme of India government

• Packaging machinery and equipment

• Refractories for initial lining

• Power generating sets

• Catalysts for initial charge

• Computer software systems

• Spares, moulds, dies, jigs, fixtures

• Catalysts for initial charge plus one subsequent charge

 Manufacturer exporters with or without supporting

• Import Export Code (IEC)

• Registration cum Membership Certificate (RCMC)

• Registration certificate from Tourism Department

• Excise Registration (if registered)

• GST Registration Certificate

• Self-Certified Copy + Original of Certificate of Chartered Accountant

• Self-Certified Copy + Original of Certificate of Chartered Engineer

• To export goods of value equal to six times of duty saved.

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