All Industry Rates of Duty Drawback effective 22.11.2014 - Customs - PUBLIC NOTICE No. 03 /2014

OFFICE OF THE COMMISSIONER OF CUSTOMS, BENGALURU CITY: C.R. BUILDING, P.B. No. 5400, QUEEN S ROAD, BENGALURU- 560 001 C. No. VIII/4/13/2014 City. Cus. Tech. Date: 01.12.2014 PUBLIC NOTICE No. 03 /2014 Sub: All Industry Rates of Duty Drawback effective 22.11.2014 - Regarding Attention of Trade is invited to the Notification 2014-Customs (N.T.), dated 17.11.2014 issued with effect from 22.11.2014 and the Board s Circular No.13/2004- Custom dated 18.11.2014 on the above subject. 2. Some of the broad aspects, from amongst the changes notified with respect of AIR of duty drawback and entries in the Schedules, have been highlighted by the Board as follows: (a) As before, the drawback rates have been determined on the basis of certain broad average parameters including, inter alia, prevailing prices of inputs, input output norms, share of imports in input consumption, the applied 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. (b) Many items already covered under the Drawback Schedule prior to incorporation of erstwhile DEPB items, shall see a change in the AIR. In continuation of the transitory arrangement, for the items incorporated in the drawback schedule from the erstwhile DEPB Scheme there is reduction in the AIR. (c) Drawback caps continue on most tariff items with AIRS above 2%. The caps have been revised. At rate below 2% there is cap with respect to guar gum and frozen marine products. (d) Further, in the case of project exports, where export product is accompanied with ARE-I and for which no drawback cap has been prescribed in the Schedule, the Note/ Condition (6) in the AIR notification now specifies a cap. It has been provided that such cases shall be declared by the exporter and the maximum amount of drawback that can be availed under the Schedule shall not exceed the amount calculated by applying the ad valorem rate of drawback to one and half times the ARE-I value. In such cases, before Let Export Order is made, the relevant ARE-I value(s) are to be recorded in the Departmental Comments field which is to be also taken into account at the subsequent stage of drawback processing. (e) Several entries have been rationalized by merging them at respective four digit level or under the respective residuary sub-heading others . Tariff item numbers have seen a change in many cases. (f) The hitherto residuary rate of 1% (composite) and 0.3% (Customs) is changed to 1% (composite) and 0.15% (Customs). Further existing residuary rates of 1.3% and 1.7%, have been increased to 1.4% and 1.9%, respectively, with some exceptions. (g) In Chapter 57, the six digit tariff item (TI) under 5705 have been changed to refer to the composition of fibre as is under other four digit tariff items. Further, all caps have been made on the basis of per sq.mtr instead of earlier per kg (for some items) in the chapter. (h) Several entries have been modified / amended to address issues brought to Ministry s notice. Laptop bags and shopping bags have been specifically mentioned at six digit level below TI 4202. Cami has been included with women s/ girl s tops in TI 611402 and 621102; three fourth pants along with capris included in Tl 610302, 610402, 620302, and 620402; and leggings included in Tl 610402. An entry for other jackets below TI 6114 and 6211 has been made. Mountain terrain bicycles have been specified against TI 871203. Cricket bats made from English willow (Tl 9506) have been distinguished from other cricket bats. (i) Separate entries have been created distinguishing certain export products such as cotton yarn of less than 50 counts or 50 or more counts (Chapter 52); core spun cotton yarn containing 3% or more of lycra / spandex/ elastane (TI 5205); flame retardant fabric treated with organic phosphorous compound (TI 5209); knotted/ tufted woolen / fine animal hair carpets containing 15% or more by weight of silk (TI 5701, 5703); embroidery in the piece, in strips or in motifs, of flax/ linen (TI 5810); cotton blankets (TI 6301); leather safety footwear with protective toe caps of composite/ synthetic material (TI 6403); glass artware/handicraft made out of two or more ply glass with or without metallic fusion (TI 7020); delivery tricycles/cycle rickshaws (TI 8712); specified electrical apparatus, of aluminium (TI 8536) and parts of aluminium for specified electrical apparatus (TI 8538). (j) AIR has been provided to calcined kaolin packed in HDPE/ LDPE/ PP bags (TI 2507), umbrellas, etc. Of Chapter 66 and artificial flowers, etc. (TI 6702). Composite Sate of 7% has been provided for all agricultural machinery etc. of TI 8432. (k) AIR has been fixed as 219.9/ gm for gold jewellery / parts and 3112.5/kg for silver jewellery / articles. Guar Gum has been provided ad valorem rate (composite) of 0.75% with a cap of 1270 per MT. (I) Note/ Condition (20) in the AIR Notification specifies that shirts shall include shirts with hoods . Similarly, Note (25) specifies that vehicles of Chapter 87 shall comprise completely built unit or completely knocked down (CKD) unit or semi knocked down (SKD) unit. 2.2.1 It has been made explicit that where the claim for duty drawback is filed with reference to the rate in the AIR Schedule, an application for fixation of Brand Rate under Rule 7 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 shall not be admissible. For this, para 2 of the Notification No.110/2014-Custom (NT) dated 18.11.2014 and amendment to the said Rule vide Notification No. 109/2014-Customs (N.T.) dated 17.11.2014 may be referred. 2.2.2 In this context, it has also been clarified that the exporters opting for claim of brand rate shall declare the figure 9801 as an identifier in the shipping bill under the Drawback Details on basis of which they may subsequently apply to Central Excise for determination of brand rate. The Commissioners of Central Excise shall facilitate such exporters in terms of paras 5A-5C of Instruction No. 603/01/2011- DBK dated 11.10.2013 with, interalia, the grant of provisional brand letters. 3. Above is brought to notice for information and necessary action. (Sandeep Prakash) Commissioner