Exporters: Know when you can claim duty drawback and Rodtep benefits

Drawback and Rodtep will be available only against export of goods. At the time of export of goods, one must declare the value of the goods in the shipping bill

We are manufacturers and exporters of chemical equipments. One of our new customers has asked us to not only supply the goods but also install them and conduct a trial run, so that they will be satisfied that the equipments work well. We have given a composite offer for the goods as well as the services, like in a works contract. When we export, can we claim duty drawback and Rodtep (Remission of Duties and Taxes on Exported Products) on the total payment that we get in foreign exchange? 

No.  Drawback and Rodtep will be available only against export of goods. At the time of export of goods, you must declare the value of the goods in the shipping bill. When you receive the payment from the foreign party, you must inform your bank the amount that represents the proceeds against export of goods and follow the usual process to generate the e-BRC. The amount that represents the payment for services will not earn any drawback or Rodtep for you. 

Can we avail of advance authorisation, duty drawback and Rodtep on the same shipment? 

Yes, in specific situations. Para 4.15 of FTP says that drawback as per rate determined and fixed by Customs authority in terms of Department of Revenue (DoR) Rules shall be available for duty paid imported or indigenous inputs (not specified in the norms) used in the export product. For this purpose, applicants shall indicate clearly details of duty paid input in the application for Advance Authorisation. As per details mentioned in the application, Regional Authority shall also clearly endorse details of such duty paid inputs in the condition sheet of the Advance Authorisation. Also, as per Para 4.08 of the FTP, the value of any other inputs used on which benefit of DBK is claimed or intended to be claimed must be taken into account for value addition calculations. At the time of shipment, you must file a DEEC-cum-drawback shipping bill and opt for Rodtep at the rates allowed for shipments in discharge of export obligation under advance authorisation. After shipment, you must file a brand rate application for determination of the drawback rate for the duty paid inputs used in the manufacture of the export product. 

  We have obtained an EPCG authorisation naming a supporting manufacturer in whose factory the capital goods imported under the authorisation will be installed. Can we allow the supporting manufacturer to import the capital goods himself instead of us importing and then giving it to him for installation?Of course, we will fulfill the export obligation.  Para 4.33 of the HBP has a specific provision treating the supporting manufacturer whose name is endorsed in the authorisation as a co-authorisation holder and allowing  the supporting manufacturer to import the goods in his own name. I do not find such a specific provision in Chapter 5 of the FTP or HBP. In my view, the same dispensation as in the said Para 4.33 must be permitted by the DGFT under the EPCG scheme also.

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