What is Duty Drawback Scheme?

The Duty Drawback Scheme aims to provide the refund/ recoupment of custom and excise duties paid on inputs or raw materials and service tax paid on the input services used in manufacturing export goods.Duty Drawback is a trusted and time-tested scheme administered by CBIC to promote exports.The scheme comprises of three categories are (a) All Industry Rate (b) Brand Rate and (c) Drawback on re-export of imported goods.The Duty Drawback provisions are described under Section 74 and Section 75 under the Customs Act, 1962. This Act laid down the various restrictions and conditions to claim drawback of duties under certain situations.
Section 74: As per section 74, if the re-exports of imported goods are identified quickly and within two years from the date of payment of duty on the importation. Then an exporter can claim 98% of the duty paid by him as a drawback under section 74.
Section 75: As per section 75, if the export of goods manufactured or processed out of imported material with value addition, a drawback of customs duties chargeable on any imported materials of a class or description should be allowed. If sale proceeds are not received within the stipulated period, a drawback is to be reversed or adjusted. Duty Drawback under section 75 can be claimed either as a fixed percentage depending upon the value of goods exported.