Now exporters have paid GST of at least 5% on inputs or would have charged 5% IGST. IGST refund not Allowed to Exporters after claiming benefit of higher duty drawback rate: CBIC Clarification Circular No.37/2018 Customs dt. After conversion of Shipping Bills they will be eligible to claim refund of IGST paid. Because in the initial period of operation of GST, exporters were not aware that if they claimed 1% Duty Drawback then they would not be allowed refund of IGST on Inputs. , I argued before *Madurai Bench of Madras Highcourt *, an issue relating to IGST refund being refused by the department because of claim of Higher duty drawback. IGST refunds have not been granted due to claiming higher rate of drawback OR where higher rate and lower rate were identical - reg. rates and caps available under columns (4) and (5) of the Schedule of All Industry Rates of Duty Drawback have been continued for a transition period of three months i.e. Brand rates are fixed under Rule 6 for specific manufacturer exporter. Any resolution of the issue? It’s like want the cake and eat it too. Export Benefits. Introduction: IGST refund inspite of duty drawback on higher rate. 4. thThis notification shall come into force on the 19 day of December, 2018. The rates have been modified based on … As per notification no. No.59/2017-Cus(NT) dated 296.2017 and 73/2017-Cus(NT) dated 26.7.2017) prescribed that ‘The rates and caps of drawback specified in columns (4) and (5 ) of the said Schedule shall be applicable to export of a commodity or product if the exporter satisfies the following conditions, namely: (ii) If the goods are exported on payment of integrated goods and services tax, the exporter shall declare that no refund of integrated goods and services tax paid on export product shall be claimed; 2.3 In terms of Rules 12 and 13 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, the shipping bill itself is treated as claim for drawback in terms of the declarations made on the shipping bill. As an export facilitation measure, for the transition period of 3 months, from July to September, 2017, Drawback at higher composite rates was continued to be granted subject to the condition that, for claiming the higher rate of drawback, the exporter had to make a declaration and certificate was required that ‘no Input Tax Credit (ITC) of CGST/IGST is claimed’. No.59/2017-Cus(NT) dated 29.6.2017), under which All Industry Rates of Drawback had been notified and which were applicable for availing composite rates during period in question (i.e. in our plastic product, DBK rate is 1.8% (Rs. E-Sealing. There have been several instances where taxpayers had to resort to litigation in the High Court in order to … 01.10.2017. 95/2018-Customs (N.T.) 22/2017-Customs dated 30.06.2017 After realizing the mistake of claiming a higher rate of drawback, the petitioner repaid the amount in full along with interest. No exporter would prefer to take benefit of 0.85% Duty Drawback against refund of IGST/ Input GST which was at least 5%. Sir/Madam, Numerous representations have been received from exporters /export associations, regarding cases where IGST refunds have not been granted because higher rate of drawback has been claimed or where higher rate and lower rate were identical. O The issue been examined extensivel y in this Ministry. Unreasonable delays in grant of refund of Integrated Goods and Services Tax (‘IGST’) has impacted several exporters in the recent past. Subject: Revision of All Industry Rates (AIRs) of Duty Drawback. Considering the fact that exporters have made aforesaid declaration while claiming the higher rate of drawback, CBIC has decided that it would not be justified allowing exporters to avail IGST refund after initially claiming the benefit of higher drawback. This rule came into affect from 1.7.2017 and it was published on 29.06.2017. and not pay. During this period, existing duty drawback scheme under Section 75 shall continue. 2.0 The issue has been examined extensively in this Ministry. Otherwise, for just 1.5% to 2% drawback amount, we will loose the 18% IGST. No exporter would prefer to take benefit of 0.85% Duty Drawback against refund of IGST/ Input GST which was at least 5%. Dear Sir, Drawback amount is 1.8 percent in column A and B both for granite. They stated that the petitioner has claimed a higher duty drawback. No.131/2016-Cus(NT) dated 31.10.2016 (as amended by Notf. We should get the options to refund the drawback amount along with interest to the government and to claim refund of the IGST. Rate of Duty Drawback available was 0.15% if they wanted refund of IGST or Inputs GST. The Centre has declined their demand for … Sub: Clarification regarding exports under claim for drawback in the GST scenario. Prior to GST, there were two All Industry Rates (AIRs) of duty drawback on exports. 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FEBRUARY 2020 AS AMENDED. Now small exporters are struck with working capital funds blocked by ITC in GST. As per the policy decision taken by the Government of India, exporters availing higher rate of duty drawback may not be eligible for refund of IGST on exports. Exporters had availed the option to take drawback at higher rate in place of IGST refund out of their own volition. 01.07.2017 to 30.09.2017) vide circular no. Happy to Share for the benefit of all, that today in the matter of Petitioner is M/s Precot Meridien Limited. Numerous representations have been received from exporters/ export associations, regarding cases where IGST refunds have not been granted because higher rate of drawback has been claimed or where higher rate and lower rate were identical. 29000) and we have paid IGST 18% (357000) as we wanted to claim refund after export procedure done. GST & Exports. 28. You cannot decide only to take from the Govt. In September, the government had modified the duty drawback rates for exporters with effect from October 1. Rajkot: The exporters in Gujarat are in a fix after claiming duty drawback at higher rate instead of normal rates. What will happen for the duty that has been paid by the exporter. 37/2018 dated 9 th October 2018 on the above subject. Drawback Rate Fixation - Forms and procedures have been prescribed for submitting details to jurisdictional Commissioner of Central Excise, who will fix the rate of duty drawback. Brand rate of duty drawback issued by the Commissioner of Central Excise. Now exporters have paid GST of at least 5% on inputs or would have charged 5% IGST. 1) The higher All Industry rates under Duty Drawback Scheme, viz. As you are aware, the higher All Industry Rates (AIRs) under Duty Drawback scheme viz. Once GST regime started, most of small exporters were not aware of the anomalies in the GST rules. We claimed drawback of 88,000 rupees and GST stuck is more than 15 lac. rates and caps available under columns (4) and (5) of the Schedule of All Industry Rates of Duty Drawback have been continued for a transition period of three months i.e. 3. Even if all industry rates are available for the produce and if the manufacturer desires to have higher rates of drawback because of higher duty paid inputs, such manufacturer can apply for special brand rates under Rule 7. Why so short notice. dated 6.12.2018 which will come into force on 19.12.2018. Pre GST, exporters were enjoying all benefits, exemption from VAT (against H Form) and Customs duty draw back of 1%. Duty Drawback Rates w.e.f. 2.4 The declarations required in terms of above Notes and Conditions and provisions of the Drawback Rules are made electronically in the EDI System. 131/2016-Customs(NT), AIR Schedule of duty drawback provides rates under two categories, one is higher rate provided in column (4), with corresponding drawback cap per unit in provided column (5) of the schedule, which can be availed by a manufacturer exporter who do not avail CENVAT facility and other is lower rate rates and caps available under col 4&5 of the schedule of AIRs of Duty Drawback have been continued for a transition period of 3 months (i.e. Niryat Bhawan, Rao Tula Ram Marg, Opp. Drawback is the refund of certain duties, internal revenue taxes and certain fees collected upon the importation of goods. The legal provisions related to Drawback claims are as under: 2.1 Notes and condition (11) of Notf. Rate of Duty Drawback available was 0.15% if they wanted refund of IGST or Inputs GST. The draw back rate has been made 2% in our product w.e.f. Even govt official were also not prepared/ ready for this automatic process. All Industry Rates (AIR) of Duty Drawback for large number of export products every year by the government. Because relevant circulars were not brought to their notice either by their GST advisers or Shipping Agents. 2. Rather it means that the last calculated cash deposit rate for that company was zero, and AD/CVD should be reported at the time of entry. The respondents have also said that as the petitioner draws a higher duty drawback, the system opts out of IGST refund automatically. Banking Regulations governing Exports. this is totally unacceptable, government is not there to collect taxes only, they have to help us out. There was no self declaration given to ports by the exporters on this. still we have not received due to higher dbk rate selection. For exports made during this transition period, the exporter can claim All Industry Rate (AIR) or Brand rate of drawback for Save my name, email, and website in this browser for the next time I comment. drawback rate and drawback cap shown in column (4) and (5) in the said Schedule for the tariff item corresponding to the export goods, if applicable, and determined as if it were a claim for duty drawback filed with reference to such rate and cap. As per the regular practice of CHA, they have filled shipping bill with higher rate of drawback. Also, the duty rates for tobacco are subject to periodic increases, so the current duty rates will often not be rates used when the tobacco was imported. dated 29.6.2017. If they cannot grant refund then in such case the exporter should be allowed re-credit in the Electronic Credit ledger. The exporter first get the Shipping Bill amended and revert back the claim if any taken or make the shipping Bill free shipping Bill by converting the same. 58/2017-Cus (N.T.) For all exports made with effect from July 1, 2017 for which higher rate of drawback is claimed, exporters have to submit the self-declaration in the … Considering the fact that exporters have made aforesaid declaration while claiming the higher rate of drawback, it has been decided that it would not be justified allowing exporters to avail IGST refund after initially claiming the benefit of higher drawback. And even it was not asked as the people approving the shipping were also not aware of this. It is a totally wrong practice. The higher rate rebated Customs duties, Central Excise duties and Service tax on inputs or input services used in the manufacture of export goods subject to the condition that no … 04.02.2020. There are many such victims who’ve got peanuts like duty drawback and got substantial amount of IGST paid and stuck! The stance of the department is that, as the writ applicant had availed higher duty drawback and as there is no provision for accepting the refund of such higher duty drawback, the writ-applicant is not entitled to seek the refund of the IGST paid in connection with the goods exported, i.e. What ignorance you are talking about, you must accept that GST was applied in hurry mode, no one was prepared for it. 2.5 By declaring drawback serial number suffixed with A or C and by making above stated declarations, the exporters consciously relinquished their IGST/ ITC claims. Duty drawback is one of the export incentives provided by the Government of India under the Foreign Trade Policy. Legally the CBIC clarification is right, but still ways are open for claiming the drawback. But they were not knowing it. It has been noted that exporters had availed the option to take drawback at higher rate in place of IGST refund out of their own volition. In fact, for period 1.7.2017 to 26.7.2017, a manual declaration was also required to be given as the changes made on 26.7.2017 were made applicable for exports made from 1.7.2017 onwards. Sub: Cases where IGST refunds have not been granted due to claiming higher rate of drawback OR where higher rate and lower rate were identical -reg Dear Member The Central Board of Indirect Taxes and Customs (CBIC) has issued a Customs Circular No. 1. According to Rule 9, Duty Drawback Rate shall not exceed 33% of the market price of export goods. The same was required to be done w.e.f. The transitionary measures notified on 30 June, 2017 were valid till 30 September, 2017 and were to be replaced Thus, a particular exporter may find that the actual customs duty paid on inputs is higher than all industry Rates fixed for his product. For exports during this period, exporters can claim higher rate of duty drawback (composite AIR) subject to conditions that no input tax credit of CGST/IGST is claimed, no refund of IGST paid on export goods is claimed and no CENVAT credit is carried forward. 01.07.2017 and during the intervening period the rate of drawback was same for lower rate and higher rate i.e. As you are aware, the higher All Industry Rates (AIRs) under Duty Drawback scheme viz. All industry Rates are fixed on an average basis. Actually an opportunity should be given to pay back higher drawback amount with interest to avail refund of GST. ‘zero rated supplies’. Madam/Sir, The Central Government has notified the revised All Industry Rates (AIRs) of Duty Drawback vide Notification No. OR higher rate and lower Numerous representations have been received from exporters 'export associations, regarding cases where IGST refunds have not been granted because higher rate of drawback has heen claimed or Where higher rate and rate were identical. 04.02.2020: Basic Guidance on How to Export. iii) Special Brand Rates. Judgment 1 st Gujarat High Court rules that claim of higher rate of duty drawback is not a valid reason for rejection of IGST refund on exports. Duty Drawback Rates w.e.f. Guide to Obtaining IEC Code. No.131/2016-Cus(NT) dated 31.10.2016 (as amended by Notfn. Similarly, exporters of finished leather will get a higher drawback of 2.36% versus 1.2% previously. [Earlier, it was done by Director of Drawback, New Delhi, upto 313-2003] Read more about Exporters claiming higher drawback must submit self-declaration on Business Standard. Army Hospital Research & Referral, New Delhi -110057, India. 2.2 Notes and Condition (12A) of Notfn. DBK- Clarification allowing higher Rate of Duty Drawback on Self Certification / Amendment in Notification no. dated 31.10.2016 relating to AIRs of duty drawback How each and everyone will be aware of this? 1.7.2017 to 30.9.2017 (Circular No.22/2017-Customs dated 30.6.2017). Duty Drawback Rates : Duty Drawback 2019-20 Duty Drawback 2018-19 Duty Drawback 2017-18 Duty Drawback 2016-17 Duty Drawback 2015-16 Duty Drawback 2014-15 Duty Draw Back 2013-14 Duty Draw Back 2012-13 Duty Draw Back 2011-12 Duty Draw Back 2010-11 Duty Draw Back 2009-10 CBEC notifies Customs and Central Excise Duties Drawback Rules, 2017 and revises drawback rate schedule Transitionary guidelines in relation to Duty Drawback scheme was notified with the implementation of GST. 9 Oct. 2018, Sub: Cases where IGST refunds have not been granted due to claiming higher rate of drawback OR where higher rate and lower rate were identical. 131/2016-Customs (N.T.) Totally wrong practice done by govt and CBIC. ICAI Results: Certificate Course on Ind AS held on 27/12/2020, MSME Mentorship Programme & 100 Facilitation Centers for MSME/ GST, launched by ICAI, ICAI Clarification on Auditor Sharing Client Information with Credit Rating Agencies, ICAI Announcement 04/01/2021: CPE Hours Compliance Deadline Extended, Gutkha Manufacturer arrested for GST evasion of 831.72 cr, CBIC Central Tax Notification 01/2021: CGST (1st Amendment) Rules 2021, ICAI Announcement 01/01/2021: CBDT to allow validations of certain UDINs upto 15/02/2021, CBDT Press Release 31/12/2020: IT Search in Kolkata, CBDT Income Tax Notification 92/2020: Vivad se Vishwas Scheme Extension, CBDT Notification 93/2020: ITR/ TAR Due Dates Extension. There is no justification for re-opening the issue at this stage. 2.0 … 2%. As an export facilitation measure, for the transition period of 3 months, from July to September, 2017, Drawback at higher composite rates will continue to be granted subject to certain safeguards i.e. When composite drawback rate was claimed (by declaring suffix A or C with Drawback serial number), exporter was required to tick DBK002 and DBK003 declarations in the shipping bills. But they were not knowing it. A zero percent cash deposit rate for an active case number is not an indicator that the merchandise is not subject to the respective antidumping or countervailing duty order. 30.9.2017 by continuing the extant Duty Drawback scheme and amending the Drawback Rules, 1995 vide Notification No. CBIC has clarified that where exporters have opted/ preferred to take drawback at higher rate in place of IGST refund for the period 1 July 2017 to 30 Sept. 2017, there is no justification in re-opening the issue at this stage and the exporters will not be allowed to avail IGST refund after initially claiming the benefit of higher drawback. This is wrong stand taken by CBIC. 5 1.7.2017 to 30.9.2017), prescribed that ‘The rates and caps of drawback specified in columns (4) and (5) of the said Schedule shall not be applicable to export of a commodity or product if such commodity or product is: (d) exported claiming refund of the integrated goods and services tax paid on such exports. As per the Department of Revenue, the drawback Committee has kept the new drawback rates same for most of the handicraft items, except glass artware where the rates have been enhanced ranging from 2.2% to 4.8%, with a new … Such refunds are only allowed upon the exportation or destruction of goods under U.S. E-Way Bill. It is unfair to claim ignorance when the CBIC has published the notification, blaming the GST advisor and shipping agents. When CBIC own people were not aware of this rule then how they can expect exporters and their CHAs to know this.