Customs Act, 1962 — Chapter X: Drawback
75. Drawback on imported materials used in the manufacture of goods which are exported
- Where, in respect of goods manufactured, processed, or on which any operation has been carried out in India, being goods entered for export and cleared for exportation under section 51 (or entered for export by post and cleared for exportation), it appears to the Central Government that drawback should be allowed of duties of customs chargeable on any imported materials of a class or description used in their manufacture, processing or the operation carried out, the Central Government may, by notification, direct that drawback be allowed in accordance with, and subject to, rules made under sub-section (2). Proviso 1: no drawback is allowed, as the rules may specify, where the export value of the goods is less than the value of the imported materials used, or not more than a notified percentage of that value. Proviso 2: where drawback has been allowed but the export sale proceeds are not received within the time allowed under FEMA, 1999, the drawback is deemed never to have been allowed, and the Central Government may prescribe the procedure for its recovery or adjustment.
- Where the quantity of a particular imported material exceeds the total quantity of like material used in the exported goods, the Central Government may, by notification, declare that so much of the material as is contained in the exported goods shall, for the purposes of sub-section (1), be deemed to be imported material.
- The Central Government may make rules for carrying out this section, including for establishing the average amount of duty paid on imported materials of any class used in the manufacture of goods of any class, for information exporters must furnish, and for other administrative matters.
Note: administered together with the Customs and Central Excise Duties Drawback Rules, 2017.
