How Do Exporters Claim Duty Drawback in India?
- Author:
- Manoj Sharma
- Verified by:
- Editorial team
- Published:
- Last modified:
Short answer
A duty drawback claim is made on the shipping bill for goods exported from India. For an electronic shipping bill, the claim is treated as filed on the date Customs gives the let export order. Most exporters claim the All Industry Rate. A brand rate applies only where no rate exists or the rate is too low.
| Applies to | Governed by | Deadline | Penalty | Last verified |
|---|---|---|---|---|
| Exporters of goods made in India using duty-paid imported or excisable inputs, and exporters re-exporting duty-paid imported goods | Customs Act, 1962 sections 74, 75 and 75A; Customs and Central Excise Duties Drawback Rules, 2017; Notification 77/2023-Customs (N.T.) as amended | Claim deemed filed on the let export order date; brand rate applications within 3 months; Customs pays within one month of filing or owes interest | Drawback is recovered if export proceeds are not realised within the FEMA period, and wrongly paid drawback is recovered with interest | 8 Oct 2026 |
What is a duty drawback claim for exporters?
A duty drawback claim asks Customs to refund duty paid on materials used to make goods that are later exported. Rule 2(a) of the Drawback Rules, 2017 defines drawback as the rebate of duty on imported or excisable materials used in manufacturing the export goods, excluding integrated tax and compensation cess.
- Legal basis: Section 75 of the Customs Act lets the Central Government allow drawback on goods manufactured or processed in India and cleared for export, under rules it makes.
- All Industry Rate: The Central Government fixes average rates for classes of goods under rule 3. The current schedule is Notification 77/2023-Customs (N.T.), in force from 30 October 2023 and amended since.
- Brand rate: An exporter-specific rate fixed by the Principal Commissioner or Commissioner of Customs. It is available where no rate exists (rule 6) or where the All Industry Rate is below 80% of duties actually paid (rule 7).
- Re-export: Imported duty-paid goods that are re-exported can get 98% of the import duty back under section 74, if identified and entered for export within two years of paying duty.
- Upper limit: A rate fixed under rule 3 cannot exceed one third of the market price of the export product (rule 9).
In short, drawback refunds input duties in cash after export. The rate comes from the schedule, or from an exporter-specific brand rate when the schedule does not fit.
Who can make a duty drawback claim in India?
Duty drawback is open to exporters of goods manufactured or processed in India, and to exporters of duty-paid imported goods being re-exported. Several categories are excluded from the All Industry Rate, including EOU, SEZ and Advance Authorisation exports. Service exporters do not get drawback.
| Entity type | Applicable | Why | Best for |
|---|---|---|---|
| Manufacturer exporting goods made with duty-paid inputs | Yes | Drawback is allowed on goods manufactured in India and cleared for export (section 75, rule 3) | Factories using imported or excisable raw materials |
| Exporter of goods with no rate in the schedule | Yes, by brand rate | Any exporter may apply for a rate to be fixed (rule 6(1)(a)) | Niche products with a Nil or missing tariff item |
| Exporter re-exporting imported goods | Yes, under section 74 | 98% of import duty is repaid if goods are identified and exported within two years (section 74) | Traders returning or re-selling imported items abroad |
| 100% EOU, SEZ, FTZ or EPZ unit | No, for All Industry Rates | Note 9(iii) and 9(iv) of Notification 77/2023-Customs (N.T.) exclude these units | Units already importing inputs duty free |
| Export against Advance Authorisation or DFIA | No, except special cases | Note 9(ii) of Notification 77/2023-Customs (N.T.) excludes these exports, with a limited proviso for Special Advance Authorisation | Exporters choosing between duty exemption and drawback |
| Freelancer or exporter of services | No | Section 75 and rule 2 cover goods and the materials used to make them | Service exporters, who should look at GST and FEMA rules instead |
How do you file a duty drawback claim at the All Industry Rate?
You file a duty drawback claim at the All Industry Rate by claiming it on the shipping bill itself. Under rule 14(1), an electronic shipping bill marked for drawback is treated as the claim, filed on the date the proper officer gives the let export order under section 51.
- Get an IEC and register on ICEGATE, then keep your bank account details current under Export Promotion, Bank account management, as the ICEGATE FAQ describes. See how to apply for an IEC code.
- Match your product to the tariff item and description in the schedule to Notification 77/2023-Customs (N.T.), because para 2 requires claims to be filed with reference to those columns.
- Check the exclusions in note 9 of the same notification, such as EOU, SEZ and Advance Authorisation exports, and check whether the rate is Nil.
- On the shipping bill, state the description, quantity and other particulars needed to decide the rate, and declare that a drawback claim is being made (rule 13(1)(a)). See shipping bill filing.
- Give the proper officer a copy of the shipment invoice or a document showing description, quantity and value (rule 13(1)(b)).
- Keep the export contract or letter of credit, and the insurance certificate where necessary, ready to accompany the claim (rule 14(2)).
- Answer any deficiency memo. A returned claim is treated as not filed until you resubmit it (rule 14(3)).
- Track the claim on ICEGATE under Services, Enquiry, Drawback Enquiry, using your IEC, PAN, location and a date range (ICEGATE FAQ).
- Realise the export proceeds within the FEMA period, or the drawback can be recovered (rule 18).
How do you apply for a brand rate of duty drawback?
You apply for a brand rate of duty drawback to the Principal Commissioner or Commissioner of Customs with jurisdiction over the place of export. Under rule 6(1)(a), the application states the proportion of materials used and the duties paid on them.
- The application is due within three months of the date relevant under rule 5(3), which links to section 16 of the Customs Act (the let export order date for goods entered for export).
- The Assistant or Deputy Commissioner can extend by three months, and the Commissioner by a further six months, for a fee of 1% or 2% of FOB value capped at Rs 1,000 or Rs 2,000 (rule 6(1)(a)).
- You may ask for provisional drawback while the rate is fixed, and Customs may require a bond (rule 6(2)).
- No brand rate is fixed if the export value is less than the value of imported materials used (rule 8).
When does a brand rate under rule 7 replace the All Industry Rate?
A rule 7 brand rate replaces the All Industry Rate when that rate is less than 80% of duties actually paid on the materials used. The application follows the same three-month window, and is not allowed once a claim at the All Industry Rate has been made (rule 7(1)).
- Customs pays a provisional amount equal to the scheduled rate and cap while the application is decided (para 3 of Notification 77/2023-Customs (N.T.)).
- Further provisional drawback can be requested, with a bond only for the difference (rule 7(3)).
How do postal exporters claim duty drawback?
Postal exporters claim duty drawback through the postal export entry under section 84. Since 15 January 2026, an electronic postal entry claiming drawback is treated as a claim filed on the date it reaches the EDI system after the clearance order (Notification 03/2026-Customs (N.T.), inserting rule 14(1A)).
- Manual postal entries continue under rule 12, whose heading the same amendment now limits to entries made manually.
Can an exporter file a supplementary duty drawback claim?
Yes. If drawback paid is less than what the notified or brand rate allows, a supplementary claim can be filed in the form at Annexure II within three months (rule 16). The three months run from the rate's gazette publication, from the communication of a revised brand rate, or from payment of the original claim.
- Extensions of nine months and then six months are possible on payment of a fee (rule 16(1)).
What documents does a duty drawback claim need?
A duty drawback claim needs the shipping bill with drawback declarations, the shipment invoice, and the documents listed in rule 14(2). Brand rate claims also need the Commissioner's rate letter and, under rule 13(2), a declaration that the manufacturing formula and imported inputs have not changed.
| Document | When needed | Rule | Best for |
|---|---|---|---|
| Shipping bill or bill of export with drawback declaration | Every claim | Rule 13(1)(a) | All goods exporters |
| Shipment invoice or document giving description, quantity and value | Every claim | Rule 13(1)(b) | All goods exporters |
| Export contract or letter of credit | Every claim | Rule 14(2)(i) | Exporters shipping against a contract or LC |
| Insurance certificate | Wherever necessary | Rule 14(2)(iii) | Shipments where insurance forms part of the terms |
| Brand rate communication from Customs | Claims at a rate fixed under rule 6 or 7 | Rule 14(2)(iv) | Brand rate claimants |
| Declaration of no change in formula or inputs | Every shipment at a brand rate | Rule 13(2) | Brand rate claimants |
| Supplementary claim form, Annexure II | Short payment of drawback | Rule 16 | Exporters paid less than the notified rate |
What happens if duty drawback rules are not followed?
If duty drawback rules are not followed, Customs can refuse, delay or recover the drawback. The most common trigger is unrealised export proceeds, where rule 18 requires recovery of the drawback paid, in proportion to the unrealised amount.
- No rate: Rates in the schedule apply only if the procedure in rules 12, 13 and 14 is met, unless relaxed (note 8 of Notification 77/2023-Customs (N.T.)).
- Deficiency: An incomplete claim is returned with a deficiency memo within 10 days and treated as not filed, so the one-month interest clock does not start (rule 14(3)).
- Non-realisation: Customs issues a 30-day notice for proof of realisation, then orders recovery, payable within 30 days of the order (rule 18(2)). See export proceeds not realised.
- Excess payment: Drawback paid in error must be repaid on demand (rule 17), within two months of the demand, with interest from the payment date (section 75A(2)).
- Used goods: No drawback is allowed on goods taken into use after manufacture, or made from inputs on which duty was not paid (rule 3(1)).
If drawback was recovered for non-realisation and the money later arrives within the period RBI allows, submit proof within three months of realisation to get the drawback repaid (rule 18(4)). For realisation deadlines and extensions, see export realisation period and extension of the export realisation period.
What is the timeline for a duty drawback claim?
The duty drawback timeline starts at the let export order, when the claim is treated as filed. Customs then has one month to pay before interest runs under section 75A(1). Separate windows apply to brand rate applications, supplementary claims and proof of export realisation.
| Trigger event | Due date | Filed where | Best for |
|---|---|---|---|
| Let export order on an electronic shipping bill | Claim deemed filed that day (rule 14(1)) | Customs EDI system | All Industry Rate claimants |
| Incomplete claim | Deficiency memo within 10 days (rule 14(3)) | Customs at the port of export | Exporters with missing documents |
| Claim filed | Payment within one month, or interest at the section 27A rate after that (section 75A(1)); up to one month of testing time is excluded (rule 14(4)) | Paid by Customs to your registered account | Exporters tracking delays |
| Relevant date under rule 5(3) for a product with no rate or a low rate | Brand rate application within 3 months, extendable by 3 and then 6 months (rule 6, rule 7) | Principal Commissioner or Commissioner of Customs | Brand rate applicants |
| Short payment, new rate or revised brand rate | Supplementary claim within 3 months, extendable by 9 and then 6 months (rule 16) | Customs, Annexure II form | Exporters paid too little |
| Date of shipment | Realise proceeds within 9 months, or 12 months if invoiced or settled in rupees (FEMA Regulations 2026, reg 5) | Through your AD bank | All drawback claimants |
| Customs notice for proof of realisation | Proof within 30 days; repay within 30 days of a recovery order (rule 18(2)) | Assistant or Deputy Commissioner of Customs | Exporters with unrealised bills |
| Demand for erroneous drawback | Repay within 2 months with interest (section 75A(2)) | Customs | Exporters paid in error |
What mistakes delay a duty drawback claim?
- Wrong item: Claiming under a tariff item whose description does not match the goods. Claims must follow columns (1) and (2) of the schedule (para 2 of Notification 77/2023-Customs (N.T.)).
- Old rates: Using an outdated rate. The schedule has been amended many times, for example Notification 64/2026-Customs (N.T.) revised gold and silver jewellery rates in July 2026.
- Missed declaration: Leaving out the drawback declaration on the shipping bill required by rule 13(1)(a).
- Late brand rate: Applying for a brand rate after the three-month window without seeking an extension (rule 6).
- Rule 7 after claim: Claiming the All Industry Rate first and then applying under rule 7, which the rule does not allow (rule 7(1)).
- Ignoring realisation: Treating drawback as final before the buyer pays. Unrealised proceeds lead to recovery under rule 18. See EDPMS closure.
How did we verify this?
Every rule, deadline and form on this page is linked to its official source, checked on the dates below.
- Customs Act, 1962 (CBIC tax information portal), Sections 16(1), 74(1), 75(1)-(3), 75A(1)-(2) (checked 8 Oct 2026)
- Customs and Central Excise Duties Drawback Rules, 2017: Rule 2 (Definitions), Rule 2(a) definition of drawback (checked 8 Oct 2026)
- Drawback Rules, 2017: Rule 3 (Drawback), Rule 3(1) and provisos (checked 8 Oct 2026)
- Drawback Rules, 2017: Rule 6 (Cases where amount or rate of drawback has not been determined), Rule 6(1)(a), 6(1)(b), 6(2) (checked 8 Oct 2026)
- Drawback Rules, 2017: Rule 7 (Cases where amount or rate of drawback determined is low), Rule 7(1), 7(2), 7(3) (checked 8 Oct 2026)
- Drawback Rules, 2017: Rule 8 (Cases where no amount or rate of drawback is to be determined) (checked 8 Oct 2026)
- Drawback Rules, 2017: Rule 9 (Upper limit of drawback amount or rate) (checked 8 Oct 2026)
- Drawback Rules, 2017: Rule 13 (Statement or declaration on exports), Rule 13(1)(a), 13(1)(b), 13(2) (checked 8 Oct 2026)
- Drawback Rules, 2017: Rule 14 (Manner and time for claiming drawback), Rule 14(1)-(4) (checked 8 Oct 2026)
- Drawback Rules, 2017: Rule 16 (Supplementary claim), Rule 16(1)-(4) (checked 8 Oct 2026)
- Drawback Rules, 2017: Rule 17 (Repayment of erroneous or excess payment) (checked 8 Oct 2026)
- Drawback Rules, 2017: Rule 18 (Recovery where export proceeds not realised), Rule 18(1)-(5) (checked 8 Oct 2026)
- Notification No. 77/2023-Customs (N.T.) dated 20 October 2023: All Industry Rates of Duty Drawback, Notes 4, 5, 8, 9; paras 2, 3, 4 (in force 30 October 2023) (checked 8 Oct 2026)
- Notification No. 03/2026-Customs (N.T.) dated 15 January 2026: Customs and Central Excise Duties Drawback (Amendment) Rules, 2026, Amendments to rules 8, 12, 13, 14; new rule 14(1A) for electronic postal exports (checked 8 Oct 2026)
- Notification No. 64/2026-Customs (N.T.) dated 16 July 2026: amendment to Notification 77/2023 (gold and silver jewellery rates) (checked 8 Oct 2026)
- RBI Notification FEMA 23(R)/2026-RB: Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, amended up to 22 September 2026, Regulation 5(1) (checked 8 Oct 2026)
- ICEGATE Help: Frequently Asked Questions, Drawback status enquiry; bank account management (checked 8 Oct 2026)
Frequently asked questions
What is the difference between the All Industry Rate and a brand rate of duty drawback?
The All Industry Rate is an average rate the Central Government notifies for a class of goods under rule 3. A brand rate is fixed for one exporter's product by the Commissioner of Customs under rule 6 or rule 7, based on actual input duties. Most exporters use the All Industry Rate.
Is a separate application needed to claim duty drawback at the All Industry Rate?
No separate application is needed for the All Industry Rate. An electronic shipping bill filed under a drawback claim is itself the claim, deemed filed on the let export order date (rule 14(1)). You still need the drawback declaration and supporting documents listed in rules 13 and 14.
How long does Customs take to pay duty drawback?
Section 75A(1) of the Customs Act requires payment within one month of the claim being filed. If Customs pays later, it owes interest at the rate fixed under section 27A from the end of that month (section 75A). Up to one month spent testing the goods is excluded from the count.
Does duty drawback refund IGST paid on exported goods?
No. Rule 2(a) of the Drawback Rules defines drawback as excluding integrated tax and compensation cess levied under section 3(7) and 3(9) of the Customs Tariff Act. Drawback covers customs and excise duties on inputs. IGST on exports follows the separate GST refund process.
Can duty drawback and RoDTEP be claimed on the same shipping bill?
The drawback rules and the All Industry Rate notification we reviewed do not bar RoDTEP on the same export. RoDTEP is a separate scheme with its own rules and exclusions. Check the current RoDTEP conditions before declaring both, and see the RoDTEP scheme guide for eligibility and the claim process.
How do exporters check duty drawback status on ICEGATE?
Exporters check duty drawback status on ICEGATE under Services, Enquiry, Drawback Enquiry. Enter the IEC, PAN, location and date range, then choose Drawback Pending Status or Drawback Sanctioned Status. Sanctioned status shows the scroll number, date and amount (ICEGATE FAQ).
Is duty drawback recovered if the buyer pays only part of the export value?
Yes, in proportion. Under the proviso to rule 18(2), the drawback recovered equals the share of drawback matching the unrealised share of sale proceeds. Recovery is waived where ECGC covers the loss, RBI writes off realisation, and the Indian mission certifies non-recovery (rule 18(5)).