The Duty Drawback Scheme (DBK) is a government initiative that provides a refund of customs and excise duties paid on inputs used in the manufacturing of exported goods. This scheme aims to promote exports by reducing production costs and enhancing the competitiveness of Indian goods in global markets.
✅ To encourage exports by reducing the financial burden of customs and excise duties
✅ To promote Make in India by making Indian products globally competitive
✅ To increase foreign exchange earnings by incentivizing exporters
✅ To ensure seamless refund of duties paid on imported or domestically sourced inputs
Types of Duty Drawback
1. All Industry Rate (AIR) Drawback
Fixed percentage-based refund on FOB (Free on Board) value of exports
Covers broad categories of products
No need for individual cost verification
Rates are pre-determined by the Directorate of Drawback, CBIC
2. Brand Rate Duty Drawback
Applicable when AIR rates are not sufficient to cover the actual duty incidence
Exporter must apply for a customized rate based on actual duty paid
Requires submission of detailed cost and duty structure
Eligibility Criteria
The Duty Drawback Scheme is available to:
Manufacturers and exporters who have paid import duties on inputs
Merchant exporters who source goods from domestic manufacturers
E-commerce exporters exporting through recognized platforms
Businesses under FTAs/PTAs that require duty refunds
Goods Covered Under Duty Drawback
Handicrafts & Textiles – Garments, carpets, home furnishings.
Engineering Goods – Auto components, machine tools, hardware.
Pharmaceuticals & Chemicals – API, specialty chemicals.
Electronics & Electricals – Appliances, circuit boards, components.
Agri & Processed Foods – Tea, coffee, spices, seafood exports.
Key Benefits for Exporters
✅ Reduced Cost Burden – Refund of duties improves profitability.
✅ Better Cash Flow – Quick refunds ensure liquidity for businesses.
✅ Encourages Domestic Sourcing – Reduces dependency on imported components.
✅ Simplified Documentation – AIR scheme requires minimal compliance.
✅ Government Support – Recognized as a priority scheme for exporters.
Documents Required for Duty Drawback Claim
To claim duty drawback, exporters must submit:
📌 Shipping Bill (mandatory for customs clearance)
📌 Export General Manifest (EGM) filed by the carrier
📌 Bank Realization Certificate (BRC) to confirm export proceeds
📌 Self-declaration stating non-availment of other export incentives
📌 Customs Declaration Forms and Tax Invoices
How is Duty Drawback Calculated?
Formula for Calculation
Duty Drawback Amount = FOB Value × Drawback Rate
For example:
FOB Value = ₹10,00,000
Drawback Rate = 2%
Refund Amount = ₹20,000
Note: If the total tax paid is less than the drawback amount, the refund will be limited to the actual tax paid.
Timeframe for Claiming Duty Drawback
⏳ The drawback claim must be filed within one year from the date of export.
⏳ In certain cases, the period can be extended up to 18 months with proper justification.
Recent Updates & Amendments
🚀 CBIC Automation: Duty drawback processing is now fully automated through ICEGATE, ensuring faster refunds.
🚀 GST Impact: Exporters must ensure they have not availed Input Tax Credit (ITC) on duties to claim the DBK refund.
🚀 Higher Drawback for Specific Sectors: Industries like textiles, leather, and engineering goods enjoy higher drawback rates.
Common Issues Faced by Exporters
❌ Shipping Bill Mismatch – Errors in documentation can lead to rejection.
❌ Delay in Bank Realization – Non-receipt of payments within the time frame.
❌ Customs Verification – Drawback can be denied if proper duty payments are not verified.
❌ Claim Rejection – Incomplete filing or claiming other incentives like IGST refund alongside DBK.
Why Choose Pragati Exim Solution for Duty Drawback Assistance?
At Pragati Exim Solution, we specialize in hassle-free duty drawback claims to maximize your export benefits. Our team of experts ensures:
✅ Error-free filing and faster processing
✅ Customized solutions based on your business needs
✅ Assistance with documentation & compliance
✅ Real-time tracking of refund claims
📞 Need Help with Duty Drawback? Contact Pragati Exim Solution today and maximize your export refunds!
- 1 Who can claim a duty drawback?
- Any manufacturer or merchant exporter who has paid duties on imported inputs used in exports.
- 2 Can I claim duty drawback and IGST refund together?
- No, you cannot claim both for the same export. You must choose one benefit.
- 3 How do I check the status of my drawback claim?
- You can track your claim status through ICEGATE (Indian Customs EDI Gateway).
- 4 What is the maximum time limit for filing a duty drawback claim?
- One year from the date of export, extendable up to 18 months with justification.
- 5 Is duty drawback applicable to e-commerce exports?
- Yes, provided the e-commerce exporter follows customs and export documentation.
- 6 How long does it take to receive the drawback amount?
- Typically 7-15 days if filed correctly through ICEGATE.
- 7 Is GST applicable on export incentives?
- No, export incentives are not subject to GST.
- 8 Is GST included in the duty drawback amount?
- No, GST is not refunded under duty drawback.
- 9 What happens if my duty drawback claim is rejected?
- You can reapply with corrected documentation or appeal through customs.
- 10 Can I claim duty drawback under Free Trade Agreements (FTA)?
- Yes, but only for duties not exempted under the FTA.
- 11 What is the role of ICEGATE in duty drawback?
- ICEGATE automates and processes claims, ensuring faster refunds.
- 12 What is a Brand Rate Drawback?
- It is a customized duty refund for specific exporters whose duty incidence is higher than the standard AIR rate.
- 13 Are duty drawback rates revised frequently?
- Yes, CBIC revises the rates annually based on industry feedback.
- 14 Can an exporter from SEZ claim duty drawback?
- No, since SEZs enjoy duty-free imports, they are not eligible for drawback.
- 15 How do I avoid claim rejections?
- Ensure proper documentation, accurate shipping bills, and timely filing.