OBJECTIVE Import of all kinds of goods and on the export of goods on certain situations attracts customs duty. The Customs Act,1962 contains provisions which govern the levy of customs duty. In this webinar, we shall understand the procedures to be followed while claiming refunds, rebate and duty drawback under customs law.

1. Procedures to Claim
Refund, Rebate and Duty
Drawback under Customs
CA Jugal Narendra Gala

2. “ Introduction
Submission of
Application Form
Documentary
Evidence
Processing of
Refund Claim
Duty Drawback
under Customs
Drawback on Goods
Exported other than
by Post
Supplementary
Claim
Repayment of
Erroneous Payment
of Drawback and
Interest
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Presentation Schema

3. “
3
Legends used in the Presentation
CG Central Government
EDI Electronic Data Interchange
FOB Free-On-Board

4. Introduction
Customs Duty refers to the tax imposed on the goods when they
are transported across the international borders
Customs duties are computed on a specific or ad valorem basis
The primary purpose of customs duty is to raise revenue,
safeguard domestic business, jobs, environment and industries
etc. from foreign competitors
All matters related to custom duty fall under the Central Board
of Indirect Taxes and Customs
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5. “ Refund under Customs
Act, 1962
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6. Refund under Customs
On import or export of goods, at times duty may not be required to be paid or be paid in excess
of what was actually leviable
It may be due to re-import, return back of goods to the exporter, relinquishment of title by
the importer, shortage/short landing, pilferage of goods or even incorrect assessment of
duty by Customs
In such cases, refund of excess amount of duty paid can be claimed by the importer or
exporter
If any excess interest has been paid by the importer/exporter on the amount of duty paid in
excess, its refund can also be claimed
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7. Submission of Application Form
▸ An application for refund is required to be filed in duplicate to the jurisdictional Deputy/Assistant
Commissioner of Customs within 1 year from the date of payment of duty and interest
▸ However, in following situations, the time limit of 1 year is computed as follows:
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Situation Computation of Time Limit
Goods which are exempt from payment of duty by
an ad-hoc exemption order issued
From the date of issue of such order
Duty becomes refundable as a consequence of
judgment, decree, order or Direction
From the date of such judgment, decree, order or
direction
Duty paid under *provisional assessment
(*Importer or Exporter is not able to produce any
documents or information required for
assessment of bill of entry)
From the date of adjustment of duty after the final
assessment thereof or
in case of re-assessment, from the date of such
re-assessment
Duty and interest in relation to a person, other than
the Importer
From the date of purchase of goods by such
person
▸ The limitation of 1 year for claiming refund does not apply where
any duty and interest has been paid *under protest. Refunds will
be granted only when the duty amount involved is Rs. 100 or more
*Importers do not agree with the
assessment made in the Bill of entry
respect of classification/valuation/rate
of duty etc.

8. Documentary Evidence
The application for refund is required to be filed with documentary or other evidence including
• Documents relating to assessment
• Sales invoice
• Duty challan as evidence of duty payment
• Documents to support the claim that the duty and interest was paid in excess
• Incidence of duty or interest has not been passed on by him to any other person i.e, the burden of the
payment of duty has not been shifted
• Refund has not been obtained already
Where on scrutiny, the application is found to be complete in all respects the Customs issues an
acknowledgement
However, in case the application is found to be incomplete, the Customs will return the same to the
applicant, pointing out the deficiency. The applicant has to then re-submit the application after making
good the deficiency
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9. Processing of Refund Claim
The application
of refund is
processed to see
if the whole or
any part of the
duty and interest
paid by the
applicant is
refundable
In case, it is
found to be
refundable, an
order for refund
is passed
In view of the
provisions of
unjust
enrichment
enshrined in the
Customs Act, the
amount found
refundable has to
be transferred to
the Consumer
Welfare Fund
However, in
some situations,
the amount
refundable would
be paid to the
applicant
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10. Exemptions
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 Importer has not passed on the incidence of such duty and interest to any other person
 Such duty and interest was paid in respect of imports made by an individual for his personal use
 Buyer who has borne the duty and interest, has not passed on the incidence of such duty and interest to any
other person
 Refund relates to export duty paid on goods which were returned to exporter
 Drawback of duty payable
 Duty or interest was borne by a class of applicants which has been notified for such purpose in the Official
Gazette by the Central Government
 Duty paid in excess by the importer before an order permitting clearance of goods for home consumption is
made where –
▹ such excess payment of duty is evident from the bill of entry in the case of self-assessed bill of entry or the
duty actually payable is reflected in the reassessed bill of entry in the case of reassessment
In the below cases, the amount refundable
would be paid to the applicant

11. Unjust Enrichment
When the person who applies for refund is not the person who has borne the burden of duty, the refund is
paid into a fund called 'Consumer Welfare Fund'
Therefore, wherever there is excess collection of duty, the refund is to be given only to the person who
has borne the burden of duty and interest, if any
Subsequently, if the importer makes a claim for refund of duty and receives the amount from the
government also, then this would be called as unjust enrichment
In other words, the incidence or burden of duty is passed on to the purchaser, from whom the importer
collects the customs duty
The duty paid by the importer on import of goods is recovered from the purchasers when the goods are
sold by the importer
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12. Delayed Refund
The Customs has to finalize refund claims without delay upon receipt of the refund
application in proper form along with all the documents
In case any duty ordered to be refunded to an applicant is not refunded within 3 months
from the date of receipt of application for refund, interest is to be paid to the applicant
The government is permitted to fix such interest between 5% and 30%. Currently, the
rate of interest is 6%
The interest on delayed refund is payable only in respect of delayed refunds of Customs
duty and no interest is payable in respect of deposits such as deposits for project
imports, security for provisional release of goods etc.
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13. “ Duty Drawback under
Customs
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14. Duty Drawback under Customs
An important principle in the levy of customs duty is that the goods should be consumed
within the country of importation
If the goods are not so consumed, but are exported out of the country, the cost of
exported goods gets unduly escalated on account of incidence of customs duty
In order to eliminate such impediments, relief of import duty is paid by way of duty
drawback provided the goods are ultimately exported
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15. “ Manner and Time for
Claiming Drawback
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16. Drawback on Goods Exported by Post
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• Outer packing carrying the address of the consignee shall carry the words “DRAWBACK EXPORT” in
bold letters
• The exporter shall deliver to the competent Postal Authority the “Form for Claim of Drawback under
Rule 12”, in quadruplicate
• Date of filing of drawback claim by the exporter shall be the date on which the aforementioned form
is received by the Proper Officer of Customs from the postal authorities and an intimation of the
same shall be given by the Proper Officer of Customs to the exporter
Form for claim
Date of filing the claim
• Deficiencies in the claim shall be shall be informed to the exporter within 15 days by a deficiency
memo and such claim shall be deemed not to have been received
• After the exporter complies the requirements within 30 days, an acknowledgement shall be issued
and the date of such acknowledgement shall be deemed to be the date of filing the claim
Deficiencies in the claim
• Bill of export, Bill of Entry, Details of the goods, Import invoice, Evidence for payment of duty
Documents Required

17. Form for Claim of
Drawback
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18. Drawback on Goods Exported other than
by Post
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• Electronic shipping bill in Electronic Data Interchange (EDI) under the claim of drawback or
triplicate copy of the shipping bill for export of goods under a claim of drawback shall be deemed
to be a claim for drawback
• Date of filing shall be the date on which the proper officer of Customs makes an order permitting
clearance and loading of goods for exportation and said claim for drawback shall be retained
by the Proper Officer making such order
Form for claim
Date of filing the claim
• Copy of export contract or letter of credit
• Copy of Form for Application for Export of Gods (ARE-1)
• Insurance certificate
Documents Required
• Deficiencies in the claim shall be shall be informed to the claimant within 10 days by a deficiency
memo and such claim shall be deemed not to have been received
• Where the exporter resubmits the claim for drawback after complying with the requirements
specified in the deficiency memo, the same will be treated as a claim
Deficiencies in the claim

19. Application for
Supplementary Claim
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20. Supplementary Claim
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▸ Where any exporter finds that the amount of drawback paid to him is less
▹ than what he is entitled to on the basis of the amount or rate of drawback determined by the CG
or Principal Commissioner or Commissioner of Customs (as the case may be),
▹ a supplementary claim in the form “Application for Supplementary Claim for Drawback under
Rule 16” may be preferred
▸ The date of filing of the supplementary claim for the purpose of section 75A (Interest on Drawback)
shall be the date of affixing the Dated Receipt Stamp on such claims

21. Contd..
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Time limit for filing
application for claim
Filed within 3 months from the date on which an order permitting clearance and loading of
goods for exportation is made by Proper Officer of customs
Authority
Period of
extension Application fee Grant / refuse of extension
Assistant/Deputy
Commissioner of
Customs 9 months
Lower of:
• 1% of the FOB value of
exports
• Rs. 1,000
The concerned authority may, on
an application and after making
such enquiry as he thinks fit, grant
extension or refuse to grant
extension after recording in
writing the reasons for such refusal
Principal
Commissioner/
Commissioner of
Customs
Further extension of
6 months
Lower of:
• 2% of the FOB value of
exports
• Rs. 2,000
Extension of Time limit

22. “Repayment of Erroneous Payment
of Drawback and Interest
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23. Repayment of Erroneous Drawback and
Interest
Where an amount of drawback and interest, if any, has been paid
erroneously or
the amount so paid is in excess of what the claimant is entitled to,
the claimant shall, on demand by a Proper Officer of Customs repay the
amount so paid erroneously or in excess, as the case may be,
and where the claimant fails to repay the amount it shall be recovered in
the manner laid down in section 142 of Customs Act, 1962 (Recovery of
sums due to Government)
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If the amount is not paid within 3 months, interest is payable from the date of expiry of 3 months
till the amount is recovered by the department at the rate prescribed by the CG (fixed between
10% and 36%)

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Thank You
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