Duty Drawback Links

Drawback is the refund of duties and taxes paid on inputs/raw materials used for the manufacture of exported goods and services. The term “Drawback” is used exclusively for refund of duties and taxes against export. Under the provisions of sub-section (1) of section 13 of The Value Added Tax Act, 1991 read with section 37 of The Customs Act, 1969 all duties and taxes paid on inputs/raw materials used for the manufacture of exported goods or services shall be refunded except income tax paid in advance and supplementary duty paid on the inputs/raw materials declared by the Government in official gazette as non-refundable.

Except a few items, all exports from Bangladesh are zero rated, meaning goods and services of export are not only exempted from duties and taxes, but also that duties and taxes paid on the inputs/raw materials used for the manufacture of exported goods or services are refundable to the exporter. Under the provision of sub-section (2) of section 13 of The Value Added Tax Act, 1991, an exporter of goods or services-cum-supplier of goods or renderer of services is allowed to adjust duties and taxes refundable to him as drawback against duties and taxes payable by him for supply of goods or services rendered. Exporters are allowed drawback on two different methods: (a) drawback on actual case-to-case basis, and (b) drawback on flat rate.

Drawback on flat rate is applicable to cases on which orders are issued by Director General, Duty Exemption and Drawback Office (DEDO) and published in the official gazette. Orders for drawback on flat rate are issued for ease of refund of duties and taxes depending on the nature of the goods of exports, nature of inputs used in the manufacture of exported goods, value of the inputs and the rate of duties and taxes applicable to the inputs. In accordance with the provision of sub-section (1) of section 13 of The Value Added Tax Act, 1991 read with sub-rule (1) of rule 30 of The Value Added Tax Rules, 1991 and sub-section (c) of section 39 of The Customs Act, 1969, any claim for drawback is to be submitted at the time export is established or within 6 months from the date of export. Claims for drawback of duties and taxes against export made to DEDO and all other claims for refund of duties and taxes are to be made to the respective Custom House or Customs, Excise and VAT Commissionerate.

DEDO has two main functions - (a) payment of drawback of duties and taxes; and (b) issuance of input-output coefficient.

Some tips/points related to payment of drawback against export:-

1. General Order No-15/Mushak/95, dated 19^th September, 1995 has been cancelled by National Board of Revenue. As a result, commercial banks are exempted from the responsibility of payment of drawback.
2. General Order No-8/Mushak/2011, dated 13^th September, 2011 was issued by NBR for payment of drawback by DEDO against 16 items on flat rates which were previously paid by commercial banks.
3. All kinds of drawback against exports are now paid from Duty Exemption & Drawback Office (DEDO).
4. Commercial Banks no longer pay any kind of drawback.
5. Item wise documents required for drawback was determined and a General Order no-01/DEDO/2009, dated 20^th May, 2009 was issued by DEDO.
6. All the required documents are to be submitted with the application (Mushak-22) in right serial number for quick payment of drawback.
7. With the introduction of ASYCUDA World, DEDO is in a position to get DEDO copy of Bill of Export online.
8. Though there is a legal provision for payment of Drawback against Return, this is neither suitable nor is in practice (as it takes more time).
9. Supplementary Duty paid on gas used for the manufacture of exported goods and services shall not be refundable as Drawback;
10. 100% direct exporters, 100% deemed exporters and exporters of EPZs can get exemption of 80% of the VAT paid on gas and electricity used in the manufacture of exported goods and services under the provision of SRO no-154/Law/2005/445, dated 9^th June, 2005, and SRO no- 157-Law/2005/448-Mushak, dated 9^th June, 2005;
11. Drawback shall not be allowed to an applicant who enjoyed bond facility;
12. Drawback in general shall not be allowed to cases against which cash incentives are taken except some especially meritorious goods which are simultaneously allowed drawback and cash incentive; and
13. Drawback of Customs Duty, Value Added Tax and Supplementary Duty is allowed to the Embassy of the United States of America on its locally purchased vehicles subject to the fulfillment of the conditions of the General Order No. 06/VAT/99, date 25^th March,1999.

 An exporter is required to apply for drawback of duties and taxes to the Director General, DEDO. He is required to apply in a prescribed Form, Mushak-22 under the provision of Sub-Rule (1) of Rule 30 of The Value Added Tax Rules, 1991. To download the form, click here.

Under drawback, following duties and taxes refundable to the exporter:

N: B: All duties and taxes imposed under The Customs Act, 1969; The Value Added Tax Act, 1991 and The Excises and Salt Act, 1944 on the raw materials used for the manufacture of exported goods and services are refundable as Drawback.

Drawback is generally paid by or taken from DEDO on the following export activities-

1. Export (direct export) of jacket, shoe, etc. made of crushed and finished leather of cow/buffalo and goat/sheep (on flat rate) ;
2. Export(direct export) of products made of jute, such as- carpet, espadrilles, etc. (on flat rate);
3. Direct export of products made of ceramic and melamine (on flat rate);
4. Direct export of automotive PP container battery (on flat rate);
5. Direct export of tea-chest (on flat rate);
6. Direct export of cutlery made of stainless steel (on flat rate);
7. Supply of SPC Poles, Transformer, Sub-Station, Electric Meter, etc. against local and international tender (on actual-case to case basis);
8. Construction and repair of road, bridge, etc. against local and international tender (on actual-case to case basis);
9. Deemed export of Poly Bag, Carton, Paper Board, etc. (on actual-case to case basis);
10. Direct export of PP Bag, Paper Shopping Bag, Articles of plastics, (on actual-case to case basis);
11. Direct export of Juice, other drinks, and items of confectionary, etc. (on actual-case to case basis);
12. Direct export of molasses (on actual-case to case basis);
13. Direct export of sugar (on actual-case to case basis);
14. Manufacture and supply of products of jute (on actual-case to case basis);
15. Supply of cables against local and international tender (Customs duty on flat rate);
16. Direct export of woven fabrics (home textiles made of woven fabrics, on flat rate);

The present Drawback system is significantly governed by the provisions of the General Order No-01/DEDO/2009, dated 20^th May, 2009 issued by Director General, DEDO especially with regard to submission of required documents for drawback. 

Downloads

Mushak- 22