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Recent Circular by CBIC: Updates on All Industry Rates (AIRs) of Duty Drawback


ent Circular by CBIC: Updates on All Industry Rates (AIRs) of Duty Drawback

The Central Board of Indirect Taxes and Customs (CBIC) has released Circular No. 26/2023-Customs dated October 26, 2023, focusing on the revision of All Industry Rates (AIRs) of Duty Drawback. The updated rates, stated in Notification No. 77/2023-Customs (N.T.) dated October 20, 2023, are scheduled to take effect from October 30, 2023.

Key Highlights of the Revised Rates:

AIRs with Designated Cap: Each tariff item in the specified schedule is accompanied by an AIR, denoted under column (4), with a cap on the Duty Drawback amount under column (5). For claims related to these AIRs, the relevant tariff item requires a suffix 'B'.

Specific AIRs for Special Export Schemes: The notification outlines AIRs for exports under Chapters 61 and 62, made under the Special Advance Authorization Scheme, where the relevant tariff items should be suffixed with 'D' instead of the usual 'B'.

Changes in AIRs: Revised rates include increased AIRs for chemicals, textiles, leather, glassware, and jewelry items. Rationalization of AIRs has been implemented for various items.

New Tariff Items: Introduction of new tariff items for sectors like sugar confectionery, chemicals, pharmaceuticals, plastics, and more. Additionally, modifications in descriptions of existing tariff items have been made for better differentiation and tax neutrality.

Duty Drawback Caps: Appropriate caps for the duty drawback amount have been provided wherever necessary.

The circular addresses representations received concerning cotton and manmade fiber blends, clarifying their inclusion under the mentioned tariff item.

Furthermore, the circular emphasizes the need for stringent due diligence to prevent misuse and mismatch of declarations in shipping bills. Field formations are directed to monitor changes in export valuation and drawback outgo for items with altered or removed caps.

Compliance Measures:

Commissioners are expected to exercise vigilance in handling sensitive shipping bills to prevent excess drawbacks.

Continuous scrutiny to observe any changes in export valuation and trends in drawback outgo.

Issuance of public notices and standing orders to guide traders and officers.

Prompt reporting of inconsistencies, errors, or difficulties faced to the Board.

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