Duty Drawback for Exporters: AIR Rates vs Brand Rate Explained

What is Duty Drawback?

Duty Drawback is a refund of customs duties paid on imported materials or excise duties paid on domestically sourced inputs that are used in the manufacture of goods subsequently exported from India. It is governed by Section 75 of the Customs Act, 1962 and is one of the most straightforward export incentives available.

Two Types of Duty Drawback

All Industry Rate (AIR): These are pre-fixed rates determined by the government for each HS code, expressed as a percentage of the FOB value of exported goods. AIR drawback is the most common route — it is automatically processed at the time of export based on the shipping bill declaration and requires no separate application.

Brand Rate: When an exporter's actual duty incidence is higher than the AIR rate, they can apply for a Brand Rate fixation. This requires submitting detailed cost statements and supporting documents to customs, which then calculates a custom rate specific to that exporter. Brand Rate is more effort but can yield significantly higher refunds for high-duty-content products.

How AIR Drawback Works

When you file a shipping bill on ICEGATE, you declare the drawback claim. After the Let Export Order (LEO) is granted, the customs system automatically processes the AIR drawback and credits the amount to your nominated bank account (registered with PFMS — Public Financial Management System) within 7–15 working days.

Drawback vs RoDTEP — Can You Claim Both?

This is one of the most common questions. The answer is yes, with conditions. You can claim both Duty Drawback (AIR) and RoDTEP on the same shipment, but only if the Drawback is for customs duty on imported inputs only (not for central excise). If you're claiming the combined AIR rate that includes both customs and excise components, you cannot additionally claim RoDTEP on those same duties.

Our consultants help you structure your claims to legally maximise both incentives simultaneously.

Key Conditions to Remember

• Goods must be exported within 1 year of import of inputs
• Export proceeds must be realised in foreign currency
• Drawback claim must be filed within 3 months of export (extendable)
• Goods should not have been exported under Advance Authorization (AA) or EPCG for the same duty

How to Apply for Brand Rate

File an application with the Commissioner of Customs within 3 months of export, along with cost statements, import bills, and proof of duty payment. The process takes 4–8 weeks but is well worth it for high-volume exporters with significant duty incidence.