Duty Drawback Scheme (DDS): A Comprehensive Guide

Introduction

The Duty Drawback Scheme (DDS) is a trusted and time-tested initiative by the Government of India, administered by the Central Board of Indirect Taxes and Customs (CBIC), to promote exports. The scheme rebates the incidence of Customs and Central Excise duties on imported and excisable materials used as inputs for goods to be exported. This ensures that exports are zero-rated and do not carry the burden of specified taxes.

Key Features of DDS

Objective

The primary objective of DDS is to provide a refund of customs duty paid on unused imported goods or goods that will be treated, processed, or incorporated into other goods for export.

Eligible Goods

DDS covers the following categories of goods:

• Goods exported after being imported into India
• Goods exported after being taken for use in India
• Goods manufactured or produced out of imported materials
• Goods manufactured or produced out of indigenous materials
• Goods manufactured or produced out of a combination of imported and indigenous materials

Claim Process

To claim duty drawback, exporters must lodge their claims within four years from the date the goods were exported. The claims can be made for compensating unrebated taxes and duties, but not for GST.

Types of Duty Drawback

There are three main categories under DDS:

1. All Industry Rate (AIR): A standard rate based on the average quantity and value of materials and duties borne by each class of material.
2. Brand Rate: A specific rate for exporters if the AIR does not cover the actual duty incidence.
3. Drawback on Re-export of Imported Goods: A rebate of up to 98% of the import duty paid on goods that were imported earlier and are now being re-exported.

Recent Developments

The CBIC has introduced automatic electronic payment of duty drawback amounts directly into exporters’ bank accounts, ensuring a more efficient and expedited disbursal process.

How to Apply for DDS

Step 1: Register on DGFT Portal

• Visit the DGFT Official Portal.
• If you do not have an account, you will need to create one by registering on the portal.
• Once registered, log in to your account using your credentials.

Step 2: Prepare the Required Documents

• Shipping Bill: Filed at the customs location where the export was made.
• Proof of Payment of Duty: Documents showing the payment of customs duty on imported goods.
• Approval from the Reserve Bank of India: For re-exports of goods.
• Pre-receipt for Drawback Amount: Signed on the reverse of the Shipping Bill with Rs1/- revenue stamp.

Step 3: Fill the Application Form

• Navigate to the “Services” section on the DGFT portal.
• Select the “DDS” option and proceed to fill the application form.
• Enter all required details such as shipping bill number, details of imported goods, and duty paid.
• Upload the necessary documents as per the guidelines.

Step 4: Submit the Application

• Review the application form to ensure all details are correct.
• Submit the application form electronically through the DGFT portal.
• Pay the required application fee online.

Step 5: Track Application Status

• After submission, you can track the status of your application on the DGFT portal.
• You will receive updates and notifications regarding the progress of your application.

Step 6: Receive Drawback Amount

• Once the application is approved, the drawback amount will be directly credited to your bank account by the customs authorities.

Conclusion

The Duty Drawback Scheme (DDS) is a crucial program that helps exporters offset some of the costs accrued during the export process, particularly in the supply or value chain. By ensuring that exports are zero-rated, DDS supports the competitiveness of Indian exports in the global market.

Important Links

• Duty Drawback Scheme Overview
• CBIC Official Website