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About Duty Drawback Scheme

Context:

The Central Board of Indirect Taxes and Customs (CBIC) recently started automatic electronic payment of duty drawback amounts directly into exporters’ bank accounts.

Relevance:

GS III: Indian Economy

Dimensions of the Article:

  1. About Duty Drawback Scheme
  2. Key Facts about Central Board of Indirect Taxes and Customs (CBIC)

About Duty Drawback Scheme

  • Administration:
    • Managed by the Central Board of Indirect Taxes and Customs (CBIC) to support exports.
  • Function:
    • Rebates Customs and Central Excise duties on imported and excisable materials used as inputs for export goods.
  • Legal Framework:
    • Governed under the Customs Act, 1962.
  • WTO Compliance:
    • Ensures exports are zero-rated, avoiding the burden of specified taxes.
  • Purpose:
    • Assists exporters in offsetting costs incurred during the export process, especially within the supply or value chain.
  • Eligible Goods:
    • To export goods imported into India
    • To export goods imported into India after having been taken for use
    • To export goods manufactured/produced out of imported material
    • To export goods manufactured/produced out of indigenous material
    • To export goods manufactured /produced out of imported or indigenous materials.
  • Claim Criteria:
    • Claimant must be the legal owner of the goods at the time of export.
    • Customs duty on imported goods must have been paid.
    • Applicable to most goods where customs duty was paid upon importation and subsequently exported.

Key Facts about Central Board of Indirect Taxes and Customs (CBIC)

  • Affiliation:
    • A part of the Department of Revenue under the Ministry of Finance, Government of India.
  • Responsibilities:
    • Oversees all indirect tax-related matters in India.
    • Formulates policy for the levy and collection of Customs duties, Central Excise duties, Central Goods & Services Tax (CGST), and Integrated Goods & Services Tax (IGST).
    • Manages the prevention of smuggling and the administration of Customs, Central Excise, CGST, IGST, and narcotics.
  • Structure:
    • Acts as the administrative authority for its subordinate organizations, including Custom Houses, Central Excise and Central GST Commissionerates, and the Central Revenues Control Laboratory.
  • Compliance and Collection:
    • Ensures that taxes on foreign and inland travel are administered in accordance with the law.
    • Guarantees that the collection agencies deposit collected taxes to the public exchequer promptly.

-Source: The Hindu


June 2024
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