12. Advance Payment of
Drawback
The Customs Duty Drawback can also be paid in advance
immediately on presentation of Customs certified shipping bill under the “Duty
Drawback Credit Scheme,
1976”. Only specified (eligible) banks are allowed to make payment
of drawback in advance under this scheme. The advance is interest free
although the-banks may charge reasonable amount to cover their administrative
expenses.
The Duty Drawback Credit Scheme
Salient Features. The salient features of the “Duty Drawback Credit
Scheme, 1976” are as follows.
(i) The payment is to be made within specified banks as an advance only,
and thus, not to be considered as payment by banks.
(ii) The payment is to be made within specified limits. As such, the banks will
sanction suitable limits to individual exporters for the purpose of
granting advance against the provisional duty drawback entitlements.
(iii) These limits will be based on the export performance, eligibility for
drawback and other relevant factors.
(iv) The margin between the amount of drawback provisionally certified by the
Customs authorities and the advance to be granted should not exceed 10 per cent.
(v) The banks may charge a reasonable amount of interest for covering their
administrative expenses or cost relating to transmission of funds between the
Centres where the reference is obtained from the RBI and the Centres where
advances are made to the exporters. Thus, rate of interest on advances made to
the exporters under theSchemeis
to be very nominal, as otherwise the advance is interest free.
(vi) It does not cover the shipment of goods for which no drawback rate has been
fixed.
(vii) The interest free advance will be given for 90 days. Thereafter,
the bank may charge interest as per RBI’s directions.
Registration with Banks. Where advance payment
of duty drawback is required, the exporter should get himself registered with
the authorized bank and obtain a reference number from the latter for
identification. Find out from the banks concerned whether they are authorised
under the Duty Drawback Credit Scheme, 1976 for making advance payment of
drawback.
Exporter’s Endorsement on Shipping Bill
The exporter should endorse the shipping bill relating
to the goods for which the amount drawback is desired to be obtained in advance
to the following effect:
“Please pay Rs………being the amount of drawback
admissible to me in respect of the shipment
covered by the shipping bill to M/s……………(Name of the Bank) through the
Reserve Bank of India quoting
the reference number……..allotted to us by the authorised bank”.
Signature of the Exporter
Custom’s Endorsement on
Shipping Bill
The Customs Authorities will scrutinize the amount of
drawback claim on the basis of declared description of goods, and endorse the
shipping bill as follows: -
“Amount of drawback as ascertained on the basis of
the declaration given in the shipping bill is Rs.
……………………………. and this amount will be admissible to the
exporter on export of the quality mentioned in the shipping bill provided that
the declared description is found to be correct on the basis of examination and
chemical test, if necessary”.
The Customs authorities will also endorse the
appropriate A.I. rate claimed by the exporter pending sanction of Special Brand
Rate by the Govt., on the relevant Shipping Bill.
Submission of Shipping Bills to Banks
The exporter should submit a copy of the shipping bill
carrying the custom’s endorsement with regard to the amount of drawback, etc.
to his bank for obtaining advance under thisSchemeafter
effecting the shipment. However, the exporter should reduce the amount of
drawback suitably if the goods actually shipped are short of the quantity
declared on the shipping bill before submitting the shipping bill to the bank.
Payment
After necessary scrutiny of the shipping bill, the bank
will grant the advance within the limit earlier sanctioned by it. (The banks
sanction suitable limits to the individual exporters for the purpose of granting
the advance against the provisional duty drawback entitlements, it is done at
the time of registration with banks of the exporters under the scheme).
The amount of advance will be almost interest free for
90 days, except nominal charge covering administrative expenses.
Claim Processing & Provisional Payment
The Customs Authorities will process the claim for
drawback in the usual course and arrange for payment of the amount to the RBI
for crediting the same to the concerned bank.
Intimation to Exporter
The Customs Authorities will also send an intimation to
the concerned exporter stating the actual amount sanctioned. If the exporter is
not satisfied with the amount sanctioned, he can file an appeal in the matter.
Provisional Payment
In case where no drawback exists and application has been
filed for its fixation, the exporter may apply in writing to the Director
(Drawback) that a provisional amount be granted towards drawback on the export
of such goods pending determination of the exact amount. These applications
containing details of shipment may be made simultaneously or after the
application for determination has been submitted. The application for fixation
of provisional rates of drawback is to be sent in the usual form, along with
Statements DBK-I, DBK-II, DBK IIA, DBK III and DBK-IIIA in the same manner as
for fixation of brand rate detailed below.
Banks will also grant advances to exporters against
provisional settlement of duty drawback on the basis of appropriate A.I. rate
claimed by the exporter on the Shipping Bill, as endorsed by the Customs,
pending sanction of Special Brand Rate by the Govt.
After the verification and examination of application,
the Government may provisionally sanction an amount not exceeding 75% of the
amount claimed. This provisional payment is adjustable against the drawback
finally payable. If the amount so adjusted is in excess or falls short of the
drawback finally payable, the exporter shall repay the excess or be entitled to
the deficiency as the case may be.
Execution of Bond
Before making a provisional payment, however, the
exporter may be required to execute a bond for such amount or for an amount not
exceeding the full amount claimed as drawback in respect of a particular
consignment and binding the exporter to: -
(i) refund the amount so sanctioned provisionally
if, for any reason, the central Government
decides not to allow the
drawback.
(ii) refund the excess, if any, paid to him
provisionally if the Central Govt. decides to allow a
lower amount of drawback.