Finance Ministry announces all industry rates of duty drawback for 2016-17

The Dollar Business Bureau

The Govt has revised the All Industry Rates (AIRs) of drawback via notification No.131/2016 Customs (N.T.) dated 31.10.2016 which comes into force on 15.11.2016. These AIRs consider various broad range parameters that include prices of inputs, input output norms, share of imports in input consumption, the rates of central excise and customs duties, incidence of service tax paid on taxable services which are used as input services in the manufacturing or processing of export goods, incidence of duty on HSD/furnace oil, value of export goods, etc.

Some of the changes that the Finance Ministry has announced are given below:

1. AIRs have been provided to certain worked articles that come under chapters 45 (coke and articles of coke), chapter 46 (Manufactures of straw, of esparto or of other plaiting materials; basketware and wickerwork) and chapter 68 (Articles of stone, plaster, cement, asbestos, mica or similar materials)

2. Some products like rubber parts for automobiles or machinery, children’s colouring books etc have been provided composite rates

3. To prevent disputes changes in tariff have been made to packaged rice, rubber parts, certain leather items, leggings, frocks, bicycles, protective sports gear, etc

4. For product differentiation, separate tariff lines have been provided for

a. surimi fish paste

b. belts

c. leather woven/braided hand-bag

d. hand-bags/wallets etc of plastic and/or textile material

e. wrist bands/tie-pins/necklaces made of leather

f. fishnets/ sports nets made of different materials

g. kurta and salwar/salwar suits/salwarkameez/churidar-kameez, with or without dupatta

h. blankets etc of blend containing cotton and MMF

i. tube or pipe fittings of alloy/stainless steel

j. motor cars, based on four categories of engine capacity each with sub-categories of manual or automatic transmission

k. cycle frames made of aluminium

l. soft toys

Apart from revisions in the AIRs, the Finance Ministry has also amended the Customs, Central Excise and Service Tax Drawback Rules which did not allow AIR or Brand Rate 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. This deletion takes effect from 15.11.2016.