Difference between Duty draw back and brand rate

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How Brand rate and draw back differs. Is there and difference between duty draw back and brand rate.
Let us find the difference between draw back and brand rate. What is brand rate and what is draw back.
What is Brand Rate in Duty Drawback.

Brand rate Difference between Duty draw back and brand rate of draw back is falling under two categories. Firstly, the exporter’s product has not been listed in the Duty draw back schedule. Secondly, the exporter considers the listed rate of draw back is insufficient to fully neutralize the duties suffered by his export product. Here in both the above circumstances, exporter opts for the brand rate of duty draw back.
Under this brand rate scheme of drawback, the exporters are compensated by paying the amount of Customs, Central Excise duties and Service Tax incidence actually incurred by the export product. For this purpose, the exporter has to produce documents/proof about the actual quantity of inputs / services utilized in the manufacture of export product along with evidence of payment of duties thereon.

How to claim brand rate of draw back.

The exporter has to make an application to the Commissioner having jurisdiction over the manufacturing unit, within 3 months from the date of the ‘Let Export’ order. The application should include details of materials/components/input services used in the manufacture of goods and the duties/taxes paid on such materials/ components/input services. The period of 3 months can be extended up to 12 months subject to conditions and payment of requisite fee as provided in the Drawback Rules, 1995.

In terms of Rule 6 of the Drawback Rules, 1995 on receipt of the Brand Rate application, the jurisdictional Commissioner shall verify the details furnished by the exporter and determine the amount/rate of Drawback. Where exporter desires that he may be granted Drawback provisionally, the jurisdictional Commissioner may determine the same, provided the exporter executes a general bond, binding himself to refund the Drawback amount granted to him, if it is found later that the Duty Drawback was either not admissible to him or a lower amount was payable. The Brand Rate letter is thereafter issued to the exporter. The Custom House of the port of export is also given a copy to facilitate payment of Drawback to the exporter.

Drawback in Exports

In case of goods which were earlier imported on payment of duty and are later sought to be exported within a specified period, Customs duty paid at the time of import of the goods, with certain cuts, can be claimed as Duty Drawback at the time of export of such goods. Such Duty Drawback is granted in terms of Section 74 of the Customs Act, 1962 read with Re-export of Imported Goods (Drawback of Customs Duty) Rules, 1995. For this purpose, the identity of export goods is cross verified with the particulars furnished at the time of import of such goods.
Where the goods are not put into use after import, 98% of Duty Drawback is admissible under Section 74 of the Customs Act, 1962. In cases the goods have been put into use after import, Duty Drawback is granted on a sliding scale basis depending upon the extent of use of the goods. No Duty Drawback is available if the goods are exported 18 months after import. Application for Duty Drawback is required to be made within 3 months from the date of export of goods, which can be extended up to 12 months subject to conditions and payment of requisite fee as provided in the Drawback Rules, 1995.

How to claim Duty Drawback

The Duty Drawback on export goods (whether AIR or Brand Rate) is to be claimed at the time of export and requisite particulars filled in the prescribed format of Shipping Bill/Bill of Export under Drawback. In case of exports under electronic Shipping Bill, the Shipping Bill itself is treated as the claim for Drawback. In case of manual export, triplicate copy of the Shipping Bill is treated as claim for Drawback. The claim is to be accompanied by certain documents as laid down in the Drawback Rules 1995. If the requisite documents are not furnished or there is any deficiency, the claim may be returned for furnishing requisite information/documents. The export shipment, however, will not be stopped for this reason.
We have discussed, what is brand rate and how to apply for brand rate, what is duty draw back and how to apply for duty draw back.

I hope, you would have come to know now, what is the difference between brand rate and draw back.

Did you like this article, please let me have your opinion below.

The above information is a part of Export import business Course online

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PRITESH PATEL: Dear Sir, i like your articles very much. my opinion that please add export incentive related information in practicle manner. it would be good. thanks and regards pritesh

Sandeep Patel: I am scrap trader and I want to import copper scrap form china. So I search for that and found some suppliers but I have some doubts regarding that. They demanding 20% advance payment by TT.SGS checking is safest way for import??Any other method for inspection and checking is available??We should have to pay 20% TT in advance or not??? (remaining 80% by L/C).Please suggest to me because I have never import before.Provide me best suggestion to find out Chinese suppliers whether they are genuine or fraud. How can we distinguish??Is there any other suggestion please give me regarding it that you think.

Chirag Shah : We have recently started our export firm for fabrics however we have some queries and would really appreciate if you can help and advise on the same as below as we did not find any information on the same on your website. 1) Since we are new so customers are sending us small sample orders to try our fabrics and the amount ranges in between $ 20 - $ 500 and they are paying these small amount to our bank. And once goods are ready they call them under their courier account as free trade samples with custom value as $ 1 only as they do not want a commercial shipment for these small amount as other expenses are too much Now please advise how can these amount be settled by our bank with RBI , our bank says it becomes Export without GR and we need to do nothing about it so please advise if this process is ok initially and if their is any limit of amount for export of this type per year , please guide on this which will be very helpful for us 2) We have recently made 1 commercial shipment against advance payment and under drawback scheme and have submitted to our bank EC copy alongwith invoice,packing list and bank bill reference number , we would like to know what is the next step that we need to do OR we have to do nothing now as bank with prepare the BRC and upload , also our CHA has informed us that we will get the drawback amount after 1 month , please advise if export process is complete once we have given the bank the mentioned papers , your advise will be very helpful as we want to abide by all RBI guidelines 3) Also we are merchant exporters based in Mumbai and we buy fabrics from surat , bhagalpur etc and export and we just have pan and iec number please advise we still need to apply for any other like BIN ,TAN, etc or anything else Thanks and looking forward to your very helpful information asap

Admin: Hello Chirag Shah, Exporting regularly by showing invoice value as $1.00 (no commercial value) is not a good practice of business, as Reserve Bank has to account each foreign inwards (for export) and foreign outward (for imports). So we suggest you to export in proper way of documentation, which also helps you in claim export benefits from various government agencies. We hope, you have already made arrangements to link bank account with customs department which directly arranges to credit your drawback for exports to your bank. As per our understanding, you need to submit EP copy of shipping bill (not EC copy of SB). As per our knowledge, if you are a manufacturer exporter, you need to register with various export promotion agencies and excise department.

shivanand: We are trader and supplied material to SEZ unit with Charging BED and SAD- SEZ unit have given us Disclaimer certificate. What is the procedure to get refund from Excise n Customs under Duty Draw back scheme. and how get refund and Basic custom duty being our is a import goods regards (shivanand.tandsi@gmail.com)

abhi gunda: I am trying to import a product.The duty is almost 27% I came to know that duty can be exempted. Will you please help me

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