The Central Board of Indirect Taxes & Customs (CBIC) on February 28, 2025, clarified that the All Industry Rate (AIR) of duty drawback should not be denied or reduced for export goods manufactured using inputs, some of which are non-duty paid or subject to concessional duty.
As per Board Circular No. 19/2005-Customs dated March 21.03.2005, the AIR of duty drawback is determined based on the average duties paid on inputs and the weighted average consumption of imported and indigenous inputs by a representative cross-section of exporters. Field formations are not permitted to investigate whether exempted inputs were used in export goods.
Officials are instructed to strictly adhere to the clarification in Board Circular No. 19/2005-Customs, and a standing order should be issued accordingly
[Instruction No. 01/2025 Customs]
