Rules 1 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The Customs and Central Excise Duties Drawback Rules, 2017 govern how exporters get back duty paid on imported or excisable materials used in goods that are exported. This first article covers the framing rules: when the Rules began, what the key terms mean, the Government's power to relax a failure, and how the older 1995 Rules ended. It also gives a map of the whole set. Exporters can take the drawback question to our compliance advisory team.
This article is written as amended up to Notification No. 03/2026-Customs (N.T.) (in force 15 January 2026), on the CBIC text of Notification No. 88/2017-Customs (N.T.) dated 21 September 2017; no official consolidated text exists. Later notifications should be checked. Drawback rates are notified separately and none is stated here.
The Rules were made under section 75 of the Customs Act, 1962 and section 37 of the Central Excise Act, 1944, extend to the whole of India and came into force on 1 October 2017. "Drawback" is the rebate of duty (excluding integrated tax and compensation cess) on imported or excisable materials used in manufacturing exported goods. Rule 19 lets the Central Government relax a failure for reasons beyond the exporter's control. Rule 20 ends the 1995 Rules, with saving for pending cases.
Rule 1: title, extent and commencement
| Sub-rule | Content |
|---|---|
| 1(1) | Short title: the Customs and Central Excise Duties Drawback Rules, 2017 |
| 1(2) | They extend to the whole of India |
| 1(3) | In force on the 1st day of October, 2017 |
The Rules are made by Notification No. 88/2017-Customs (N.T.) dated 21 September 2017. Our guide to section 75 of the Customs Act explains the parent power.
Rule 2: definitions
- Drawback (clause (a)), for goods manufactured in India and exported, means the rebate of duty, excluding integrated tax leviable under section 3(7) and compensation cess leviable under section 3(9) of the Customs Tariff Act, 1975, chargeable on imported or excisable materials used in the manufacture of the goods.
- Excisable material (b): any material produced or manufactured in India subject to a duty of excise under the Central Excise Act, 1944.
- Export (c): taking out of India to a place outside India, or taking out from a place in the Domestic Tariff Area to a special economic zone, and it includes loading of provisions, store or equipment for use on board a vessel or aircraft proceeding to a foreign port.
- Imported material (d): any material imported into India on which duty is chargeable under the Customs Act, 1962.
- Manufacture (e): includes processing of or any other operation carried out on goods; "manufacturer" follows.
- Tax invoice (f): the tax invoice referred to in section 31 of the CGST Act, 2017.
Note that drawback under these Rules does not return the integrated tax or compensation cess; for those, see our GST and income-tax guides.
For example, Bhavani Garments exports shirts made from imported buttons and domestic fabric. The duty on the imported buttons and the central excise duty on excisable inputs are the kind of duties drawback is meant to rebate. A dispatch from its factory in the Domestic Tariff Area to a unit in a special economic zone is an "export" under clause (c).
Rule 19: power to relax
If the Central Government is satisfied that, for the export of any goods, the exporter or his authorised agent has, for reasons beyond his control, failed to comply with any provision of the Rules, and has thus been entitled to drawback, it may, after considering any representation and for reasons recorded in writing, exempt the exporter or agent from that provision and allow drawback on the goods. The power is discretionary and needs recorded reasons.
Rule 20: repeal and saving
Rule 20(1)
From the commencement of the 2017 Rules, the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 "shall cease to operate". Those older Rules are not current law.
Rule 20(2): what carries on
Notwithstanding that cesser:
- (a) every application for determination or revision of the amount or rate of drawback for goods exported before the commencement and not disposed of before then is decided under the 1995 Rules as if the new Rules had not been made;
- (b) any claim for payment of drawback for goods exported before the commencement and not disposed of before then is likewise decided under the 1995 Rules; and
- (c) every amount or rate of drawback determined under the 1995 Rules and in force immediately before the commencement ceases to operate for goods exported on or after commencement.
The 2026 amendment
Notification No. 03/2026-Customs (N.T.), in force 15 January 2026, amended rules 8, 12, 13 and 14 to bring exports by post where an entry is made under section 84 of the Customs Act, 1962 within the Rules. Those changes are covered in our article on rules 12 to 14 and, for rule 8, in our article on rules 4, 5, 8 and 9.
A map of the Rules
| Rules | Subject | Article |
|---|---|---|
| 1, 2, 19, 20 | Commencement, definitions, relaxation, repeal | This article |
| 3 | Drawback and the cases where none is allowed | Rule 3 |
| 4, 5, 8, 9 | Revision of rates, date of effect, no-rate cases and upper limit | Rules 4, 5, 8, 9 |
| 6 | Brand rate where no rate is determined | Rule 6 |
| 7, 10, 11 | Low rate, information and access to the factory | Rules 7, 10, 11 |
| 12 to 14 | Claim procedure for postal and other exports | Rules 12 to 14 |
| 15 to 18 | Payment, supplementary claim, repayment and recovery | Rules 15 to 18 |
Where to look for rates
The amount or rate of drawback is set by the Central Government by notification; these Rules do not print any. For how rates, the claim process and brand rate work in practice, see our guides on duty drawback rates, claim process and brand rate and drawback and re-export.
Eligibility turns on the facts of each export and the rate notified for the goods.
Need help with drawback?
If you export goods made from imported or excisable inputs and want to be sure the drawback route is right, we can walk through the Rules with your shipping bill data. Contact our compliance advisory team.
Key takeaways
- The Rules took effect on 1 October 2017 and extend to the whole of India.
- Drawback excludes integrated tax and compensation cess.
- The Government may relax a failure beyond the exporter's control, with reasons recorded.
- The 1995 Rules ceased to operate, with saving for pending applications and claims.
- Rates and amounts are notified; the Rules print none.
Read next
- Rule 3: when drawback is allowed and when it is not
- Rules 12 to 14: claiming drawback on postal and other exports
- Section 75 of the Customs Act, 1962: drawback on imported materials
- Duty drawback: rates, claim process and brand rate
Disclaimer: Based on the customs rules named above as published on the CBIC Tax Information Portal and, for sets amended since 2023, the amending notifications (read through a TaxClue consolidated reading text; no official consolidated text exists), as consulted on 3 October 2026. Later notifications, rates and the Customs Act, 1962 provisions referred to should be checked. This article is general information, not legal advice; check the official text before acting.