Brand rate of duty drawback is given to exporters of those products which do not figure in all industry rate (AIR) of drawback table. The special brand rate is given for export of those products whose rates are considered to be insufficient to fully neutralise incidence of duties suffered on the inputs utilised in the production/manufacture of export product. An exporter can opt for brand rate duty drawback scheme.
Under the scheme, exporters are compensated by refund of the amount of customs and central excise duty incidence which is actually incurred on the inputs used in the manufacture of export products. The exporter, however, has to produce documents/proof of actual quantity of inputs utilised in the manufacturer of export product along with evidence of payment of duties.
The CBEC, as part of the decentralisation and trade facilitation exercise, has directed its field formations not to submit proposal for fixation of brand rate of drawback to the commissioner of central excise for approval. Earlier, the brand rate of duty drawback was fixed by the ministry.
Referring to specific issues pertaining to fixation of brand rate of drawback for finished/lining leather, the CBEC has clarified that while computing the drawback for leather articles, including footwear, the AIR available on finished/lining leather should be considered on the consumption of finished/lining leather in the export product. This is being done to ensure that the duties on inputs like finishing chemicals, penetrating agents, wattle extracts and leather dyes and auxiliaries used in finishing raw hides are relieved.
It was further clarified by the CBEC that in case of complete bicycle, manufactured by using various cycle parts and also certain other accessories/parts, not listed under drawback schedule, the brand rate could be allowed in respect of such extra parts/accessories, provided that these parts/accessories are procured on payment of duty and not imported duty free under the advance licence/DFRC/DEPB schemes.