Duty Drawback Claims
Money the exporter is entitled to and routinely does not collect, because the claim has to be right at the shipping bill and not afterwards.
Drawback is refunded input duty, not a subsidy
When an exporter has paid customs duty on imported inputs, or on materials that went into a product that then left the country, that duty was never meant to be borne by the export. Drawback is the mechanism that gives it back, and it exists so Indian exports are not carrying domestic tax into foreign markets.
It is not discretionary and it is not a favour. It is an entitlement with conditions, and the conditions are procedural: the claim is made at the time of export, on the shipping bill, with the right declarations. Exporters lose drawback far more often to a missed tick-box than to a rejected claim.
The claim is made when you export, not later
This is the single most important thing to understand. The shipping bill is the claim. If it is not filed as a drawback shipping bill, with the correct drawback serial number and the required declarations, then the entitlement is compromised from the moment the goods leave — and recovering it afterwards means an amendment process that is slow, discretionary and frequently unsuccessful.
Which is why drawback belongs with whoever files your export clearance rather than with the finance team a month later. We file it as part of the shipping bill, not as a separate exercise.
What decides the amount
The rate comes from the drawback schedule against the classification of the exported product, and the schedule distinguishes between rates that cover customs duty alone and rates that assume other credits have not been taken. Getting this wrong in either direction causes a problem.
- The drawback serial number applied to the exported goods, which follows the classification
- Whether you are claiming the all-industry rate or a brand rate fixed for your specific inputs
- The FOB value declared, since most rates are a percentage of it with a cap per unit
- Whether other export incentives have been availed, which can restrict the rate you may claim
- Realisation of export proceeds within the permitted period — drawback is recoverable if the money never arrives
Brand rate, when the schedule underpays you
The all-industry rate is an average across a product category. If your product carries an unusually high imported-input content, that average will be well below what you actually paid, and you are entitled to apply for a brand rate fixed on your own consumption data.
It is more work — input-output norms, consumption statements, verification — and it is worth doing where the gap is material and the volume is steady. We will tell you when the numbers justify it rather than treating every exporter as a candidate.
Where claims go wrong
The failures are consistent and nearly all preventable at filing.
- The shipping bill was filed without the drawback declaration, so there is nothing to process
- The wrong drawback serial number, producing a lower rate or a query
- A mismatch between the shipping bill, the invoice and the packing list, which stops the claim pending clarification
- Bank account details not registered or not current, so a sanctioned claim cannot be credited
- Export proceeds not realised within the permitted window, making the drawback recoverable
- Nobody tracking sanctioned-but-uncredited claims, which is how entitled money quietly ages
We track it to the credit, not to the filing
Filing a claim is easy to treat as the finish line. It is not — a claim can be filed correctly, sanctioned, and still not reach your account because a bank mandate is stale or a query was raised and never answered.
We reconcile claims filed against amounts credited and chase the difference. On a steady export programme that difference is usually the most immediately recoverable money in the whole operation, and almost nobody is looking at it.
Asked often about this service
Can we claim drawback after the goods have shipped?
Only through an amendment, which is slow and discretionary and often fails. The claim belongs on the shipping bill at the time of export — which is why drawback should sit with whoever files your clearance rather than being handled separately afterwards.
Can we claim drawback and other export benefits together?
Sometimes, and sometimes claiming one restricts the rate available under the other. The schedule distinguishes rates on that basis, so the right combination is a calculation rather than a default. We work it out per consignment rather than applying a blanket policy.
What is a brand rate and do we need one?
It is a rate fixed on your own verified input consumption instead of the industry average, and it is worth pursuing when your imported-input content is well above the norm the schedule assumes. It takes more work, so we recommend it only where the gap justifies it.
What happens if our overseas customer does not pay?
Drawback is contingent on export proceeds being realised within the permitted period. If they are not, the drawback becomes recoverable with interest. It is worth tracking alongside your receivables rather than treating it as settled once credited.