The Brand Rate of Duty Drawback is permitted in cases, where the export product does not have any AIR of Duty Drawback/or the same neutralizes less than four-fifths of the duties paid on materials used in the manufacturing of export goods. This kind of work is managed by the jurisdictional commissioners of Customs & Central Excise. Any exporter who wishes to avail of the Brand Rate of Duty Drawback, must 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 the norms of Rules 6 and 7 of the Drawback Rules, 1995.

Under the Brand Rate of Duty Drawback scheme, an exporter is compensated by paying the amount of customs/central excise duties and service tax incidence actually incurred by the export product. For this reason, an exporter has to produce documents and proof of the actual quantity of inputs & services, which were used in the manufacturing of the export products, 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:

  • The materials/components/input services used in the manufacture of goods
  • The duties/taxes paid on such materials/components/input services

This 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 will verify the details, submitted by the exporter and determine the amount and rate of Drawback. Whenever an exporter wishes that he or she 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 or her, if it is found later that the Duty Drawback was either not admissible to him or her, or a lower amount was payable.

The Brand Rate letter is then issued to the exporter. The Custom House of the port of export is also sent a copy to facilitate payment of Drawback to the exporter. In the case of goods which were imported earlier on payment of duty, and are later sought to be exported within a specified period, the 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 Section 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 checked with the particulars submitted at the time of import of such goods. When the goods are not put into use after import, 98% of Duty Drawback is admissible under Section 74 of the Customs Act, 1962.