The Central Board of Indirect Taxes and Customs’s (CBIC) Drawback Division under the Department of Revenue, Ministry of Finance has issued instructions to all customs and concerned authorities to follow a time bound processing of duty drawback claims, which were recently reduced from seven days to three days.
It has also asked the authorities to submit a report on àction taken in this context to the Board before December 25, 2020.
According to the revised rule, for at least 90 per cent of the claims, the time frame has been reduced from seven days to three days, and it has also instructed to dispose all remaining claims by March 31, 2021.
The objective is to reduce pending claims and improve the rate of disposal of duty drawback claims.
“In the fifth meeting of the National Committee on Trade Facilitation (NCTF), it has been instructed that at least 90 per cent of drawbacks should be credited within the time period of three days. Further, the refund may be deposited into the customer account in T+2 days,” stated the letter.
The letter also mentions that as per circular dated April 24, 2018, issued by the office of the Principal CCA, CBIC, “it has already been instructed to the authorised banks that the credit/ refund of the drawback amount to the exporters’ account may be done either on the same day of receiving the computerised Customs Drawback Advise along with the supporting cheque on or the next working day.”
Therefore, it has instructed that the reduction of timeline given by the NCTF to credit duty drawback within three days should be complied by all authorities.
Dr Viranchi Shah, National Vice President, IDMA said, “It is a good step for the industry, and will definitely help improve cash flow in hands of the exporters. Historically, when handling any changes there could be temporary technical glitches, but those are transient and are usually rectified in short time, and we all should be ready to cooperate with authorities for that short time. In the a long run, this is a welcome step.”
Dinesh Dua, Chairman Pharmexcil said, “Duty drawback issues have been pending for a long time and now the Government of India has made it clear that this has to be settled as soon as possible and there should be no carry over of duty drawback in the next financial year. So that, exporters start with a clean slate with no disputes. It will smoothen and help the exports to get their duty drawback efficiently and promptly.”
S V Veerramani, Past National President, IDMA, Chairman and Managing Director, Fourrts (India) Laboratories said, “Normally, we get Duty Drawback for all exports (without advance licence) within 20 days from onboard BL/AWB. Now the rate is 1.30 per cent on FOB. The target of disposing in seven working days for the drawback or three days for the credit period into the Bank is a welcome move and is appreciated.”