Other aspects relating to Duty Drawback: - CBEC's Customs Manual 2023 - Customs

7. Other aspects relating to Duty Drawback: 7.1 The Citizen Charter provides for remission of Drawback within 7 working days of filing of manifest in the case of electronic processing of declarations or filing of a paper claim in the case of manual processing. 7.2 While processing Drawback claims, whether under Section 74 or Section 75, wherever any deficiency is noticed in the claim, it is to be communicated to the exporter in a clear unambiguous manner within a period of 10 days, from the date of filing of the claim. Commissioners of Customs are to undertake a periodic review and monitoring of the status of pending drawback claims. [Refer Circular No.46/2011-Cus., dated 20-10-2011] 7.3 The field formations are to ensure periodic sample checks and verifications with respect to export declarations accepted for AIR drawback purposes and these are to be regarded as audit checks and their proper record maintained. These include checks on value, present market value, verification of actual freight payment certificates when CIF or C F values are declared, declarations that affect the applicability of AIR itself etc. In the pre- GST era, these declarations included whether goods were or were not manufactured or exported in terms of rule 19(2) of Central Excise Rules or by availing rebate on material used in manufacture or processing in terms of rule 18 of Central Excise Rules. In the post GST era (transition period of July to September 2017), the declarations were to be given w. r. t. the availment of input tax credit of CGST or IGST on the export goods or inputs or input services used in the manufacture of export product, refund of IGST paid on the export goods or carrying forward of CENVAT credit on export product or on inputs or input services used in the manufacture of export product. Random checks with respect to debit notes raised by foreign buyers after initial realization by exporter, reduction in invoice value after proceeds are negotiated or realized, etc may also be considered by Commissioners. Detections that indicate lower FOB/realization or other information of relevance when benefits under FTP are also involved should also be intimated to Regional Authority of DGFT for necessary action. [Refer Circular No.46/2011-Cus., dated 20-10-2011,Instruction F.No. 603/01/2011-DBK dated 11-10-2013 and Circular no. 32/2017- Customs dated 27.07.2017] 7.4 Further, by way of audit, the Commissioners are also to exercise special checks, in cases of first time exporters, exporters who have taken large amounts of drawback suddenly, sensitive destinations, sensitive products etc., to ensure there is no misuse of the drawback facility. 7.5 Commissioners are to ensure that Internal Audit wings achieve desired diligence levels and a significantly improved performance. In Customs these areas include payment of reexport drawback and cases of manual processing of drawback. [Refer Instruction F.No. 603/01/2011-DBK., dated 11-10-2013] 7.6 Field formations are to monitor levels of pendency of EGM not filed, EGM filed in error and no filing of stuffing reports to ensure trade facilitation. The mismatch of declaration made in the Shipping Bill (item details vis- -vis drawback details) should be verified to avoid the excess payment of drawback on this account. [Refer Instruction F.No. 603/01/2011-DBK., dated 26.06.2012] 7.7 Board has issued an8 point comprehensive action plan for implementation of Duty Drawback Scheme vide D.O. letter No. F. No. 609/41/2018-DBK dated 27.09.2018. The main action points are briefly as follows: (i) EGM to be filed by various stakeholders within a week of let export order, (ii) EGM errors should not exceed 1% of total shipping bills, (iii) Queries should be resolved well within a month s time and number of queries should be monitored at senior level, (iv) Drawback claims must be cleared on a daily basis and scrolls generated by major Customs stations at least twice a week and by others once every week or more, (v) Percentage of shipping bills scrolled out within seven days should increase to 75% in the current FY and taken further in next FY, (vi) All efforts should be made to reduce the percentage of shipping bills scrolled out beyond thirty days to nil, (vii) Focus on disposal of application for Brand rate fixation so that no application remains pending beyond one month at the end of this FY, (viii) Timely issuance of SCNs in cases of non- reconciliation of sale proceeds and time bound disposal of SCNs.