CBIC
How Do I Claim Duty Drawback in India?
All-Industry Rate vs Brand Rate, claim process, required documents, typical rates by category, and drawback vs RoDTEP.
By Aaryan Kakani · · 3 min read
What is duty drawback and how does it work?
Duty Drawback is a refund of customs duties, central excise duties, and service tax paid on inputs (raw materials, components, packaging) used in the manufacture or processing of exported goods. Governed by Sections 74 and 75 of the Customs Act, 1962, and administered by CBIC (Central Board of Indirect Taxes & Customs).
| Parameter | Section 74 | Section 75 |
|---|---|---|
| Applies to | Re-export of imported goods (as-is or after minor processing) | Export of manufactured goods using imported or domestically procured duty-paid inputs |
| Drawback amount | Up to 98% of import duty paid (depreciates with use. Schedule in Re-export Rules) | AIR per Drawback Schedule or Brand Rate based on actual duty incidence |
| Time limit | Re-export within 2 years of import; claim within 1 year of duty payment | Claim within 3 months of LEO (extendable by 3 months by Commissioner) |
| Typical use case | Imported capital goods returned, defective goods sent back, trade samples | Exporters manufacturing finished goods from imported/domestic raw materials |
Should I use All-Industry Rate or Brand Rate?
Under Section 75, drawback is available at either the All-Industry Rate (AIR) or the Brand Rate. You choose at the time of filing the shipping bill. The distinction matters for your refund quantum.
| Parameter | All-Industry Rate (AIR) | Brand Rate |
|---|---|---|
| Rate source | Fixed per HS code in Drawback Schedule (Notification No. 07/2024-Customs NT, revised annually) | Calculated based on actual duty paid on inputs for your specific product |
| Drawback quantum | Lower. Industry average | Higher. Reflects your actual duty burden |
| Documentation | Minimal. No proof of duty payment needed | CA certificate, input-output norms, duty payment proof required |
| Approval process | Automatic. No prior approval needed | Apply to jurisdictional Commissioner of Customs; determination takes 30-90 days |
| Cap | Drawback cap (per unit) specified in Schedule | No cap. Based on actual duty incidence |
| When to use | Low-duty-content products, small exporters wanting simplicity | High-duty-content products, large exporters where difference justifies compliance cost |
What are the drawback rates for my product?
AIR drawback rates vary by HS chapter and specific tariff item. Below are typical ranges from the current Drawback Schedule. Actual rates depend on the specific 8-digit tariff item. Always verify against the latest notification.
| Product Category | HS Chapters | AIR Range | Cap (per unit) |
|---|---|---|---|
| Textiles & Garments | 50-63 | 1% - 7% | Yes, varies by item (e.g., Rs 10-50/piece for garments) |
| Leather & Footwear | 41-43, 64 | 2% - 5% | Yes, Rs 5-30/pair for footwear |
| Chemicals & Pharma | 28-38 | 0.5% - 3% | Yes, per kg/litre caps |
| Engineering Goods | 72-84 | 1% - 4% | Yes, per kg or per piece |
| Gems & Jewellery | 71 | Nil - 1% | Minimal; most items nil |
| Food & Agro Products | 01-24 | 0.5% - 2% | Per kg caps common |
| Handicrafts & Woodwork | 44, 46, 66, 96 | 1% - 3% | Per piece caps |
| Plastics & Rubber | 39-40 | 1% - 3.5% | Per kg caps |
Who is eligible for duty drawback?
Who Can Claim
- Any exporter with a valid IEC (Import Export Code) from DGFT
- Manufacturer-exporters and merchant-exporters (merchant exporters claim through the supporting manufacturer)
- Exporters under EOU/SEZ schemes can claim drawback on inputs not covered by their duty-exemption entitlement
What conditions must I meet to claim drawback?
| Condition | Rule Reference | Details |
|---|---|---|
| Export within time limit | Sec 74: 2 years from import | For Sec 75, no time limit on export itself, but claim must be filed within 3 months of LEO |
| BRC/eBRC obtained | Rule 16A | Bank Realisation Certificate confirming export proceeds received. Required for final drawback credit (not for initial disbursement for AIR) |
| No CENVAT/ITC on same inputs | Rule 3 | Cannot claim drawback on duty components already availed as CENVAT credit or GST ITC |
| Market price condition | Sec 75(2) | Export value must not be less than the market value of goods. Drawback denied if goods exported at artificially low prices |
| No simultaneous Advance Auth for same duty | Para 4.07 FTP | If inputs imported under Advance Authorisation (duty-free), drawback not available on those inputs. Drawback allowed on other duty-paid inputs only |
How do I file a duty drawback claim?
How does the AIR drawback process work?
- File shipping bill with DBK claim. Select shipping bill type "DBK" (Drawback) on ICEGATE. Declare the drawback serial number and rate from the Drawback Schedule.
- Customs assessment. Appraising officer verifies HS code, drawback serial number, and value. Query raised if discrepancy found.
- Let Export Order (LEO). Customs grants LEO after examination (if selected) or risk-based clearance.
- EGM filing. Carrier/shipping line files Export General Manifest confirming goods loaded on vessel.
- Drawback credited. Amount auto-credited to your designated bank account via DBK scroll. Timeline: typically 3-7 working days after LEO for AIR claims with no queries.
How do I apply for Brand Rate drawback?
- Apply for Brand Rate fixation. File application in Form DBK-I with the jurisdictional Commissioner of Customs along with CA certificate (input-output statement, duty calculations).
- Provisional drawback at AIR. While Brand Rate application is pending, you receive drawback at the AIR on your shipping bills.
- Commissioner determination. Commissioner verifies input-output norms and actual duty incidence. May call for factory verification. Target timeline: 30-60 days (often extends to 90 days).
- Brand Rate letter issued. Specifies the fixed Brand Rate (usually higher than AIR) for a defined period.
- Differential drawback paid. Difference between Brand Rate and AIR (already disbursed) is credited to your account. Future shipping bills use the Brand Rate directly.
What documents do I need for drawback?
| Document | Required For | Notes |
|---|---|---|
| Shipping Bill (DBK type) | AIR + Brand Rate | Must select 'DBK' shipping bill type on ICEGATE; declare drawback S.No. |
| ARE-1 / ARE-2 | Central Excise inputs | Application for Removal of Excisable Goods for export; now largely digital |
| Commercial Invoice | AIR + Brand Rate | FOB value, HS code, quantity, IEC, GSTIN must be stated |
| Packing List | AIR + Brand Rate | Item-wise details with net/gross weight per package |
| BRC / eBRC | Final drawback credit | Bank Realisation Certificate from AD bank confirming receipt of export proceeds |
| Brand Rate Letter | Brand Rate only | Issued by jurisdictional Commissioner after DBK-I determination |
| CA Certificate | Brand Rate only | Chartered Accountant certificate on input-output norms and actual duty incidence |
| Bank Account Details | AIR + Brand Rate | Designated bank account registered with customs for DBK scroll credit |
| Duty Payment Proof | Brand Rate only | Bills of Entry, customs duty receipts for imported inputs; excise invoices for domestic inputs |
| Input-Output Statement | Brand Rate only | Detailed statement of inputs consumed per unit of export product with wastage norms |
Why is my drawback claim stuck or rejected?
| Issue | Cause | Resolution |
|---|---|---|
| Drawback stuck. Query raised | HS code mismatch, value discrepancy, missing EGM, drawback S.No. Error | Check query on ICEGATE → respond with corrected documents → appraiser clears within 7-15 days |
| Amount mismatch | Wrong drawback S.No., incorrect quantity/value declared, cap applied | File supplementary claim (Rule 15) for short-paid drawback; ensure S.No. Matches exact tariff item |
| SB amendment needed | Error in shipping bill. Wrong drawback type, HS code, or value | File amendment request under Sec 149 of Customs Act; post-export amendments require Commissioner approval |
| Supplementary drawback claim | Brand Rate fixed after AIR already disbursed; partial claim initially | File supplementary claim with Brand Rate letter; differential auto-calculated by system |
| Time-barred claim | Claim filed after 3 months (Sec 75) or 1 year (Sec 74) | Sec 75: Commissioner can extend by 3 months (with cause). Sec 74: no extension. Claim forfeited |
| Drawback recovery | Export proceeds not realised within prescribed period (Rule 16A) | Customs issues notice to refund drawback. Ensure BRC/eBRC obtained and submitted to customs to prevent recovery action |
What is the difference between drawback and RoDTEP?
Duty Drawback and RoDTEP (Remission of Duties and Taxes on Exported Products) are complementary schemes. They cover different duty components and can be claimed together on the same export shipment.
| Parameter | Duty Drawback | RoDTEP |
|---|---|---|
| Duties covered | Customs duty + central excise on imported/domestic inputs | Embedded central, state & local taxes/levies not refunded under any other mechanism (electricity duty, mandi tax, fuel tax, stamp duty, etc.) |
| Can claim both? | Yes | Yes |
| Typical rate range | 0.5% - 7% (varies by HS code) | 0.3% - 4.3% (varies by HS code) |
| Disbursement | Cash credit to bank account (DBK scroll) | Transferable duty credit e-scrips on ICEGATE; can use for customs duty payment or sell |
| Ease of claim | Simpler for AIR; Brand Rate requires CA certificate and Commissioner approval | Automatic for most items. Declare on shipping bill, scrip generated post-export |
| Combined benefit example | Textile export (HS 6205): Drawback AIR 2.5% + RoDTEP 3.8% = 6.3% total refund on FOB value |
Update history
- First published.