Revised DBK Rates

No.14/005/012(DBK)/2007                                                                                       July 16, 2007

 All members of the Council                                     IMPORTANT

Sub: Revised All Industry Rates of Duty Drawback (DBK Rates)

Dear members,

We wish to inform you that the Department of Revenue, Ministry of Finance, Government of India has notified the revised All Industry Rates of Duty Drawback covering all export products including leather & leather products vide Notification No. 68/2007 – Customs (NT) dated July 16,2007 issued by Department of Revenue, Ministry of Finance, Government of India.

As far as leather and leather products are concerned, we are pleased to inform that the Duty Drawback rates for almost all export items including ceilings falling under Chapters 41, 42, 43 & 64 have been increased. The Drawback schedule relating to Chapters 41,42,43 and 64 is enclosed herewith for your information and reference.

It may be mentioned here that the Council earlier undertook a comprehensive exercise in compiling the input cost data and incidence of customs, central excise duties and service tax suffered on inputs used in manufacturing various export products. Based on the data collected from the member-exporters, the Council submitted a comprehensive proposal to the Directorate of Drawback, justifying for realistic fixation of DBK Rates and also other issues concerning rationalization of entries in the DBK schedule, notifying DBK Rates for new entries etc.,.

As in the case of last year, the Government of India constituted a three member High Level Committee to work out the methodology for calculation of All Industry Rates of Duty Drawback and submit its recommendation to the Government. The Council made a detailed presentation to the High Level Committee about the status of the industry, future potential for growth and the need to provide realistic compensation of duties suffered on inputs used in export product through the revised DBK rates.

We are glad to inform the members that the following specific recommendations made in the Council’s proposal have been favourably considered by the Department of Revenue in the review exercise.

The wording “Travelling Bags/ Luggages” have been included under the Chapter heading 420201 to facilitate higher DBK for these items.

• A separate entry under tariff item 640613 has been introduced to facilitate DBK for footwear uppers made of synthetic/textile materials.
• The separate entries for boots & half boots in the earlier DBK Schedule, were creating interpretation problems at the Customs. To avoid this, the entries have been merged to single entry. Similarly, for boot uppers & half boot uppers, a single entry has been notified.
• The wording “All” has been omitted in tariff items 640301, 640302, 640305, 640306, 640307, 640308, 640601, 640602, 640605, 640606,640607 and 640608 in respect of description entries for shoes/boots/uppers so as to avoid customs classification problems.
• Articles of Apparel made of leather have also been included in condition no.14 giving the outer visible surface area for classification of leather goods (vide Customs Circular No. 25/2007 – Customs dated July 16,2007 issued by Department of Revenue, Ministry of Finance, Government of India).
• Harness and Saddlery Goods exported in sets are also entitled for Drawback as per Customs Circular No. 25/2007 – Customs dated July 16,2007 issued by Department of Revenue, Ministry of Finance, Government of India.

DBK 2007-08 Notification

DBK Schedule