The CBIC issued Instruction No. 01/2025 – Customs dated February 28, 2025 regarding the admissibility of the All Industry Rate (AIR) of duty drawback on export goods manufactured from inputs, some of which are non-duty paid. It refers to Board Circular No. 19/2005-Customs dated March 21, 2005, clarifying that the AIR is determined based on average duties paid on inputs and average consumption of inputs by exporters. It instructs staff to follow this clarification strictly and to report any difficulties to the Board.
It has been brought to the notice of the board that All Industry Rate of duty drawback is being denied or reduced on export goods using inputs some of which are not duty paid or are paid at concessional rate of duty.
In this regard, attention is invited to Board Circular No. 19/2005 – Customs dated 21.03.2005 issued vide F.No. 609/13/2004 – Dbk on the above subject matter wherein it was clarified that the concept of AIR of duty drawback is that the rates are determined taking into account the average duties paid on the inputs and in determining the rates, the average (weighted average) consumption of imported / indigenous inputs of a representative cross – section of exporters is taken into account and it is not open to the field formations to probe whether certain exempted inputs have been used in the manufacture of the export goods.
Suitable standing order may be issued to instruct the staff to follow the clarification issued under Board Circular No. 19/2005 – Customs dated 21.03.2005 scrupulously.
The Instructions can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2025/02/cs-ins-01-2025.pdf
