CBIC Revises Duty Drawback Rates for Gold and Silver Jewellery

CBIC Revises Duty Drawback Rates for Gold and Silver Jewellery

Issue: To provide clarity and certainty to exporters in the diamond, gold, and silver jewelry sector, the Central Board of Indirect Taxes and Customs (CBIC) revised the fixed All Industry Rates (AIR) of Duty Drawback applicable to exported goods.

Facts:

• The Duty Drawback scheme allows exporters to receive a refund of the Customs Duty and Central Excise Duty previously paid on inputs used to manufacture exported goods.
• The fixed All Industry Rates (AIR) are crucial for exporters as they provide a pre-determined percentage of the Free On Board (FOB) value as a drawback, simplifying the process.
• The CBIC periodically revises these rates based on current prices and input taxes.

Decision:

The Central Board of Indirect Taxes and Customs (CBIC) issued a notification announcing the revision of the All Industry Rates (AIR) of Duty Drawback for exported goods, specifically focusing on items like gold and silver jewelry.

Key TakeDowns:

• Revised Drawback Rates: The notification introduces new, updated rates for duty drawback applicable to jewelry and articles made from gold and silver. This revision reflects the changes in the underlying tax structure and the market prices of the precious metals.
• Support for Exporters: This is a key measure to support the export-oriented diamond and jewelry sector. By providing a timely and accurate refund of embedded duties, the scheme ensures that Indian products remain competitive in the global market.
• Clarity and Compliance: The notification provides essential clarity to exporters regarding the amount of refund they are entitled to claim, simplifying their compliance and improving their working capital cycle.
• Effective Date: The new rates are effective from the date specified in the notification.