Duty Entitlement Pass Book Scheme

It is an export benefit scheme under FTP 2015-2020.

After  the export, the exporter is given a Duty Entitlement Pass Book Scheme at a pre-determined credit, determined by DGFT, on the FOB value.

The credit amount is only entitled to be adjusted to the amount to be paid as customs duty and cannot be withdrawn or adjusted otherwise. The DEPB credit is freely transferable.

The main objective is to neutralize the occurrence of customs duty on the import content of the export product, by way of grant of duty credit against the export product.

Duty Drawback Scheme:

As DEPB scheme, duty drawback also works on the principle of exempting taxes on inputs used for exports.

Duty drawback means the refund of duty of customs and duty of central excise that are chargeable on imported and indigenous materials used in the manufacture of exported goods.

Goods eligible for drawback applies to

  • Export goods imported into India as such
  • Export goods imported into India after having been taken for use
  • Export goods manufactured / produced out of imported material
  • Export goods manufactured / produced out of indigenous material

The Duty Drawback is of two types:

  1. All Industry Rates (AIR)
  2. Brand Rates

1) All Industry Rates:

  • It is based on the averaging principle.
  • It is notified by the government in the form of Drawback schedule every year.
  • The drawback rates are valid for a year.
  • At present, the schedule covers 2837 entries.

2) Brand Rates:

  • It is allowed in cases where the export product does not have any AIR of Duty Drawback.
  • This work is handled by the jurisdictional Commissioners of Customs & Central Excise.
  • Exporters who wish to avail of the Brand Rate of Duty Drawback need to apply for fixation of the rate for their export goods.

For claiming the drawback on export of goods, the exporter is not required to file a separate application for granting the amount of drawback, as the drawback shipping bill itself is treated as a claim and it is finalised after ensuring that the goods have been presented for examination by Customs and cleared for being put on board a vessel/aircraft and ensuring that the necessary formalities to enable processing of claims are complied with. The payment of drawback claim is made directly by the Customs House over the port/airport land customs stations through which the export is made.

The elements necessary to claim drawback are;

  • The goods on which drawback is claimed must have been previously imported
  • Import duty must have been paid on these goods when they were imported
  • The goods should be entered for export within two years from the date of payment of duty on their importation (whether provisional or final duty). The period can be further extended to three years by the Commissioner of Customs on sufficient cause being shown.
  • The goods must be capable of being identified as imported goods.
  • The goods must actually be re-exported to any place outside India.
  • The market price of such goods must not be less than the amount of drawback claimed.
  • The amount of drawback should not be less than Rs. 50/-