How to surrender Duty Drawback
This query is : Resolved
22 April 2025
We are an exporter of medical products and are eligible for the duty drawback. We exported the product to our customer against an advance payment. Currently, the customer has returned the product as he is unhappy. We have to surrender the duty drawback. Please advise.
12 August 2025
Procedure to Surrender Duty Drawback:
Check the relevant customs notifications / circulars:
The guidelines for surrendering duty drawback are generally issued by Central Board of Indirect Taxes and Customs (CBIC).
Usually, you must refund the drawback amount within a specified time frame.
Calculate the amount to be surrendered:
The full amount of duty drawback that was credited/paid for the returned goods.
File a refund/surrender application with the customs authorities:
Submit a letter/request to the jurisdictional customs office explaining the situation.
Provide documents showing the export, duty drawback claimed, and goods returned.
Attach proof of goods returned, such as return invoices or shipping documents.
Make payment/refund of the duty drawback amount:
Pay back the duty drawback amount to the Customs department.
The payment can be made through the prescribed mode (online payment or challan).
Adjust your accounting entries:
Reverse the duty drawback credit claimed earlier in your books.
Important points:
Surrendering duty drawback is mandatory if goods are returned or export order is cancelled.
If not surrendered, it may lead to penalties and interest under Customs law.
Customs may also seek details during audit or assessment.
Sample Accounting Entry for surrendering Duty Drawback:
Debit: Duty Drawback Refund Payable (liability)
Credit: Bank/Cash (payment made to Customs)
Reference for procedure:
Circular No. 08/2018-Customs (N.T.) dated 21.02.2018
Customs Manual / Notifications under the Drawback Scheme
Check the relevant customs notifications / circulars:
The guidelines for surrendering duty drawback are generally issued by Central Board of Indirect Taxes and Customs (CBIC).
Usually, you must refund the drawback amount within a specified time frame.
Calculate the amount to be surrendered:
The full amount of duty drawback that was credited/paid for the returned goods.
File a refund/surrender application with the customs authorities:
Submit a letter/request to the jurisdictional customs office explaining the situation.
Provide documents showing the export, duty drawback claimed, and goods returned.
Attach proof of goods returned, such as return invoices or shipping documents.
Make payment/refund of the duty drawback amount:
Pay back the duty drawback amount to the Customs department.
The payment can be made through the prescribed mode (online payment or challan).
Adjust your accounting entries:
Reverse the duty drawback credit claimed earlier in your books.
Important points:
Surrendering duty drawback is mandatory if goods are returned or export order is cancelled.
If not surrendered, it may lead to penalties and interest under Customs law.
Customs may also seek details during audit or assessment.
Sample Accounting Entry for surrendering Duty Drawback:
Debit: Duty Drawback Refund Payable (liability)
Credit: Bank/Cash (payment made to Customs)
Reference for procedure:
Circular No. 08/2018-Customs (N.T.) dated 21.02.2018
Customs Manual / Notifications under the Drawback Scheme
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