In exercise of the powers conferred by section 75 of the Customs Act, 1962 (52 of 1962) and sub section (2) of section 37 of the Central Excise Act, 1944 (1 of 1944), read with rules 3 and 4 of the Customs and Central Excise Duties Drawback Rules, 2017

## Report on Customs Duty Drawback Amendment Notification No. 26/2025 **1. Executive Summary:** This report analyzes Notification No. 26/2025-Customs N.T., dated April 17, 2025, which amends a previous notification (No. 77/2023-Customs N.T.) concerning Customs and Central Excise Duties Drawback Rules. This amendment revises the drawback rates for specific tariff items under Chapter 71, impacting the drawback amounts for certain goods. The key change involves substituting existing drawback figures with new, higher figures for tariff items 711301, 711302, and 711401. This report aims to inform affected industries of these crucial changes and their potential implications. **2. Introduction:** The purpose of this report is to provide a detailed analysis of Notification No. 26/2025-Customs N.T., issued by the Ministry of Finance, Department of Revenue, on April 17, 2025. This notification introduces amendments to existing drawback rates under the Customs and Central Excise Duties Drawback Rules. The analysis is based solely on the information provided within the notification text. **3. Policy Overview:** * **Original Policy Being Amended:** Notification No. 77/2023-Customs N.T., dated October 20, 2023, published as G.S.R. 792 E. This notification establishes the drawback rates for various goods. * **Core Objective(s):** The core objective of the original policy, as inferred from the amendment text, is to provide drawback (refund) on customs and central excise duties paid on materials used in the manufacture of goods exported from India. This aims to promote exports by reducing the burden of indirect taxes on exporters. The objective of the current amendment is to *adjust* these drawback rates for specific goods. **4. Background and Rationale:** The amendment likely stems from a reassessment of the input costs and duties associated with the manufacture of the specified goods (tariff items 711301, 711302, and 711401). The increased drawback rates suggest that the government has determined that the existing rates were insufficient to fully compensate exporters for the duties paid on inputs. Economic factors such as exchange rate fluctuations, changes in input costs, or strategic decisions to incentivize specific exports, could be reasons for the adjustments. **5. Key Provisions / Changes:** This notification introduces specific changes to the drawback rates outlined in the Schedule of Notification No. 77/2023-Customs N.T., within Chapter 71. The changes are as follows: * **Tariff Item 711301:** The drawback amount in column 4 is revised from ₹335.50 to ₹405.40. * **Change:** Increase in drawback amount. * **Effect:** Exporters of goods under this tariff item will receive a higher refund on duties paid. * **Tariff Item 711302:** The drawback amount in column 4 is revised from ₹4468.10 to ₹4950.03. * **Change:** Increase in drawback amount. * **Effect:** Exporters of goods under this tariff item will receive a higher refund on duties paid. * **Tariff Item 711401:** The drawback amount in column 4 is revised from ₹4468.10 to ₹4950.03. * **Change:** Increase in drawback amount. * **Effect:** Exporters of goods under this tariff item will receive a higher refund on duties paid. **6. Target Audience and Stakeholders:** The primary target audience and stakeholders are: * Manufacturers and exporters dealing with goods classified under tariff items 711301, 711302, and 711401 of the Customs Tariff Act. * Customs brokers and consultants involved in facilitating export-related transactions. * Government agencies responsible for administering and monitoring the drawback scheme. **7. Implementation Aspects (Inferred):** * **Responsible Agency:** The Ministry of Finance, Department of Revenue, is responsible for issuing and implementing this notification. * **Procedures:** Exporters will need to adjust their drawback claims to reflect the revised rates. Customs officials will need to process claims based on the new figures. * **Timelines:** The notification is effective from the date of its issuance, April 17, 2025. Any exports made on or after this date should be eligible for the revised drawback rates, assuming all other eligibility criteria are met. **8. Expected Outcomes / Impact of Changes:** The intended outcome of these changes is to provide enhanced financial incentives for the export of goods falling under the specified tariff items. The increase in drawback rates is likely to: * Reduce the cost burden on exporters, potentially making them more competitive in international markets. * Potentially boost export volumes for these goods. * Correct any previous underestimation of duties borne by exporters, leading to fairer compensation. **9. Conclusion:** Notification No. 26/2025-Customs N.T. represents an important update to the Customs and Central Excise Duties Drawback Rules. By increasing the drawback rates for tariff items 711301, 711302, and 711401, the government aims to support exporters and promote exports in these sectors. Affected businesses should take note of these changes and adjust their export strategies and drawback claims accordingly. This amendment is significant as it directly impacts the profitability and competitiveness of businesses engaged in the export of the specified goods.

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