I (Meaning and importance of Exports) Unit Structure

14.3 DUTY DRAWBACK 
14.3.1 MEANING 
 
Duty Drawback means refund of custom duties paid on the 
import of raw materials components and packing material. DBK 
also involves refund of central excise duties paid on indigenous 
material used in the manufacture of export products. 
The Duty Drawback scheme has been introduced to 
compensate the exporters for the additional costs in form of taxes 
that he has to bear, apart from the actual cost of the import. 
Therefore, the Central excise and customs duty paid on the 
imported items are reimbursed to the exporter to give him the 
opportunity of making his products competitive in the international 
markets. 
14.3.2 Duty back is available on the following items. 
 
a) Raw materials and components used in the process of 
manufacture. 
b) Materials used in the manufacture of raw materials and 
components used on the manufacture of finished products. 
c) Irrecoverable wastages which arises in the process of 
manufacturing. 
d) Material used for packing the finished export products. 
e) Finished products. 

---

232 
14.3.3 DBK is not admissible
If the 
– 
a) Amount of drawback entitlement is less than Rs. 50/-. 
b) Goods have been taken into use after manufacture except 
tea chest used as packing materials for export of blended 
tea. 
c) Goods are produced using imported materials or excisable 
materials in respect of which duties have not been paid. 
d) Products manufactured by 100% EOUs and units located in 
FTZs / EPZs. 
e) Amount of drawback is less than 2% of net FOB value of 
exports. 
f) Goods exported to Nepal, Bhutan, Tibet and SingKiang. 
14.3.4 Procedure to claim DBK.