The Central Board of Indirect Taxes and Customs (CBIC) on February 28, 2025, issued a circular regarding the admissibility of AIR of duty drawback on export goods manufactured from inputs, some of which are non-duty paid.
The board has noted that the All Industry Rate (AIR) of duty drawback is being denied or reduced for export goods that use inputs, some of which are not duty-paid or are paid at a concessional rate. In response, Board Circular No. 19/2005-Customs dated March 21, 2005, clarifies that AIR is based on the average duties paid on inputs, considering the weighted average consumption of both imported and indigenous inputs across a representative group of exporters. The circular emphasizes that field formations should not investigate whether exempted inputs have been used in the manufacture of export goods.
[Instruction No. 01/2025-Customs]
