Indian Ministry of Finance has revised the All Industry Rates (AIR) of Drawback, payable to the exporters by the Revenue department to neutralize various duties suffered by the former in respect of goods exported. The revised rates given in the new schedule, which also makes certain changes in tariff items description, will come into force from 15-11-2016.
According to CBEC Circular No. 50/2016-Cus., dated 31-10-2016, explaining the changes made in the schedule, for certain products including rubber parts for automobile or other machinery, composite rates have now been provided. Further, changes have been made in certain descriptions for packaged rice, rubber parts, certain leather items, leggings, frocks, bicycles, protective sports gear, etc. Similarly, for better product differentiation, separate tariff lines have now been carved out from existing tariff items.
While residuary rate (customs) provided to items across various chapters has been reduced from 1.9% to 1.5% and from 1.4% to 1.1%, the new notification provides for alternative AIRs on export of garments made against the Special Advance Authorization, specified under recently introduced Para 4.04A of Foreign Trade Policy 2015-20.
It may be noted that Customs, Central Excise and Service Tax Drawback Rules, 1995 have also been amended by Notification No. 132/2016-Cus. (N.T.), dated 31-10-2016 to omit sub-rule (1) of Rule 8, with effect from 15-11-2016. The said provision prohibits AIR or Brand Rate of drawback to exports (other than postal exports or exports under Advance Authorization) if the amount of drawback is less than 1% of F.O.B. value of export, except where the amount of drawback per shipment exceeded Rs.500.