Exporters using imported goods, which attracts safeguard duty, will get duty refund on export of final product.
The safeguard duties, Central Board of Excise and Customs (CBEC) has said, are rebatable as drawback.
The move would help large exporters as they avail the benefit of brand rates, exporters body FIEO said.
CBEC in a circular said: "since safeguard duties are not taken into consideration while fixing All Industry Rates of drawback, the drawback of such safeguard Duties can be claimed under an application for brand rate...
"This would necessarily mean that drawback shall be admissible only where the inputs which suffered safeguard duties were actually used in the goods exported as confirmed by the verification conducted for fixation of Brand Rate".
It said that where imported goods subject to safeguard duties are exported out of the country as such, then the drawback payable under a section of the Customs Act would also include the incidence of safeguard duties as part of total duties paid, subject to fulfilment of other conditions.
FIEO said that the move would not help small and medium units.
"We would demand from the government that the safeguard duty should be factored in all industry rates so that MSMEs too can avail the benefit," Ajay Sahai, Director General & CEO at Federation of Indian Exports Organisation (FIEO) said.
A country imposes safeguard duty on significant surge in imports to give a level-playing field to domestic players.
