NO:CLE-HO/POL/LNI-ART/2025
28^th February 2025

Members of the Council

Sub : Applicability of drawback on shipments made under IGCR

Dear Member

This in in continuation to our earlier circular dated 24^th February 2025 on the above subject.

The Central Board of Indirect Taxes and Customs has now issued a Customs Instructions dated 28^th February 2025 (copy enclosed) stating the following.

–          It has been brought to the notice of the board that All Industry Rate of duty drawback is being denied or reduced on export goods using inputs, some of which are not duty paid or are paid at concessional duty.

–          In this regard, attention is invited to the Board Circular No.19/2005 dated 21.3.2004 issued vide F. No. 609/13/2004/DBK on the above subject matter wherein it was clarified that the concept of AIR of duty drawback is that the rates are determined taking into account the average duties paid on the inputs and in determining the rate, the average (weighted average) consumption of imported/ indigenous inputs of a representative cross-section of exporters is taken into account and it is not open to the field formations to probe whether certain exempted inputs have been used in the manufacture of export goods.

– Suitable standing order may be issued to instruct the staff to follow the clarification issued under Board Circular No. 19/2005 – Customs dated 21.3.2025 scrupulously.

Members may kindly note the above.

With kind regards

R. Selvam
Executive Director

 

• Drawback for non duty paid materials
• DBK on duty free materials – Customs Instruction No 1 of 2025