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Drawback Circular No.20/2002-Cus. Dated 21 st March, 2002
Grant of All Industry Rate of Drawback on export of Bicycles under Advance Licence Scheme- regarding.
 

In the Drawback table 2001-2002, All Industry Rates of Duty Drawback have been notified for ‘Complete Bicycle’ under SS No.87.52 and various parts of bicycle under SS No.87.54 to 87.122. Also separate rates have been made available for bicycle tyres under SS No.40.01 and bicycle tubes under SS Nos.40.02 and 40.03. These rates are, however, applicable to the normal exports.

2. A representation has been received from the Engineering Export Promotion Council highlighting the peculiar position of exports of complete bicycle under Advance Licence Scheme. Since under the Advance Licence Scheme the exporters have access to duty free inputs, the Drawback rates are denied to them in terms of General Note 2(b) to the Drawback table. EEPC has pointed out that there can be many cases of exports of complete bicycle where the exporters might be using only some inputs as imported inputs and rest are all indigenous. Similarly, there can be cases, where the bicycle being exported is devoid of some components as per the buyer’s requirements for the reason that the buyer in the importing country contemplates procuring those inputs either in the said importing country or source the same from some other country. EEPC has requested that in such cases, at least the duty drawback in respect of indigenous inputs can be made available to the exporters instead directing them to follow the brand rate route of drawback.

3. The issue has been examined in the Board. It has been observed that the All Industry Rate of Duty Drawback in respect of complete bicycle under SS No.87.52 of the Drawback Table, has been determined by taking into account the duty incidence on the following 22 components:-

S.No.         SS No.                 Name of the Component
1.             40.01             Tyre ( one pair)
2.             40.02             Tube ( one pair)
3.             73.09             Chain
4.             87.55             B B Axle
5.             87.56             B B Cups ( one set )
6.             87.57             B.B. Ring
7.             87.64             Brake Set
8.             87.73             Chain Wheel & Cranks
9.             87.78             Fork Fitting (one set)
10.          87.80             Frame
11.          87.84             Free Wheel
12.         87.85             Front Fork
13.         87.88             Handle Bar
14.         87.90             Handle Stem
15.         87.91             Hub (one pair)
16.         87.96             Mud Guard
17.         87.98             Pedals (one pair)
18.         87.104         Rim
19.         87.105         Saddle
20.         87.109         Seat Pillar
21.         87.110         Seat Pillar Bolt
22.         87.112         Spoke (one gross)

4. Since these items are clearly identifiable and have specific drawback rates, it is possible to deduct the quantum of duty drawback for a component or components which is/are either not supplied or is/are imported under DEEC Advance Licence Scheme, from the total drawback admissible to a complete bicycle. This dispensation will be easier to administer and shall obviate the need of applying for a brand rate of duty drawback in such cases.

5. It is therefore clarified that field formations can allow drawback to the exports of complete bicycles on the above lines. This circular is also applicable for the past cases of exports effected from 4.10.2001 onwards.

6. Suitable public notice for information of the trade and standing orders for guidance of the staff may kindly be issued accordingly.

7. The receipt of this Circular may kindly be acknowledged.