Ease duty payback for benefit of exporters

Exports fell in June by 4.6 per cent to $23.8 billion from $24.9 billion in the corresponding month of 2012. While policymakers may speculate on whether the depreciation of the rupee will help reverse the decline in exports, the ground-level problems that impose unnecessary costs and make our exports uncompetitive must receive due attention.

It has been a well-established policy for decades that duty paid on goods exported must be given back to the exporters. However, that does happen automatically. Under Rule 18 of the Central Excise Rules, 2002, the government has issued notification no 19/2004-CE (NT) dated September 6, 2004, to grant rebate of excise duty paid on export goods. Part-I of Chapter 8 of the Manual of Supplementary Instructions issued by the Central Board of Excise and Customs (CBEC) details the procedures. Even someone familiar with these procedures and documentation finds that many a times it takes anywhere between two and three months to get the rebate of the excise duty. Invariably, there are some costs associated with getting the rebate.

At present, the exporter is required to prepare four copies of Form ARE-1 and present the original and duplicate to the Customs, along with other documents, for getting the let export order (LEO). His declarations on ARE-1 are verified by the central excise authorities, whenever he gets the containers examined and sealed by them. Once the Customs gives the LEO and records the particulars on the ARE-1, the exporter should get the money immediately. But that does not happen. The exporter is required to produce before the rebate sanctioning authority the original of ARE-1 along with self-certified copies of the shipping bill, the bill of lading and the excise invoice. Sanction of rebate is made only after receipt of Customs-certified duplicate ARE-1 in a sealed cover and excise-certified triplicate ARE-1. Unless the channels are greased, some fault-finding ensures delay or rejection of the rebate claim.

In fact, Para 3 (c) of the notification no. 19/2004-CE (NT) dated September 6, 2004, says: "An exporter may enter the requisite information in the shipping bill filed at such place of export, as may be specified by the board, for claiming rebate by electronic declaration on Electronic Data Inter-change System of Customs. The details of the corresponding application shall be entered in the Electronic Data Inter-change system of Customs upon arrival of the goods in the Customs area. After goods are exported or order under section 51 of the Customs Act, 1962, (52 of 1962) has been issued, the rebate of excise duty shall, if the claim is found in order, be sanctioned and disbursed by the Assistant Commissioner of Customs or the Deputy Commissioner of Customs." For some strange reason, this procedure has not been operationalised.

In case the rebate claim is rejected, the exporter cannot approach the tribunal after the first appeal. He has to approach the central government for a revision. A joint secretary usually decides such revision applications and usually passes orders that take no account of the fact that the exporter is only asking for the money he has given to the government.

Excise rebate should be credited to the account of the exporter immediately after exports, the way duty drawback is disbursed. The second appeal should go to the tribunal instead of the revisionary authority.
Email: tncr@sify.com