Rules 7 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.
A notified drawback rate may be well below the duty an exporter actually paid on its inputs. Rule 7 allows an application for a special brand rate in that case. Rules 10 and 11 give officers the power to ask for information and records and to inspect the factory, which is how drawback claims and rate applications are verified. Our compliance advisory team can help you prepare for either.
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; these rules were not changed by it. No official consolidated text exists. Later notifications should be checked. No rate is stated here.
If the drawback rate determined under rule 3 or revised under rule 4 is less than eighty per cent of the duties paid on the materials or components used, the exporter may apply to the Commissioner for a rate within three months (extendable as in rule 6), provided no claim under rule 3 or 4 has been made for those goods. The rate can be raised only if the notified one is in fact less than eighty per cent of the amount determined on the application. Officers may call for information and books (rule 10) and inspect the premises (rule 11).
Rule 7(1): the application
Where the exporter finds that the amount or rate of drawback determined under rule 3 or revised under rule 4 for the class of goods is less than eighty per cent of the duties paid on the materials or components used, he may, except where a claim for drawback under rule 3 or rule 4 has been made, within three months from the date relevant under rule 5(3), apply to the Principal Commissioner or Commissioner having jurisdiction over the place of export. The application states all relevant facts, including the proportion of materials or components used and the duties paid.
The condition "except where a claim has been made" is important: an exporter who has already claimed at the notified rate cannot use rule 7 for that claim.
The provisos
The four provisos mirror rule 6(1):
- for several places of export, apply to any one of the jurisdictions;
- the Assistant or Deputy Commissioner may extend the three months by three months, and the Principal Commissioner or Commissioner by a further six months;
- extension may be granted or refused on application, with reasons recorded for a refusal; and
- the application fee for extension is 1% of the FOB value of exports or one thousand rupees, whichever is less, before the Assistant or Deputy Commissioner, and 2% of the FOB value or two thousand rupees, whichever is less, before the Principal Commissioner or Commissioner.
See our article on rule 6 for how these provisos operate.
Rule 7(2): determination
On receipt, the Commissioner may, after inquiry, allow drawback at such amount or rate as he determines appropriate, if the notified amount or rate is in fact less than eighty per cent of the amount or rate determined under this sub-rule. Meeting the eighty per cent test on the exporter's side is not enough; the Commissioner's own determination must confirm it.
Rule 7(3): provisional and further provisional drawback
Provisional drawback specified by the Central Government is paid by the proper officer. If the exporter wants further provisional drawback, he applies with the rule 7(1) application in the manner of rule 6(2)(a), giving details of the provisional drawback already paid. Further provisional drawback follows rule 6(2)(b) and (c) and rule 6(3), with one difference: the bond is only for the difference between the amount determined under rule 3 or 4 and the provisional drawback the Commissioner has authorised under rule 7.
Rule 7(4): revocation or withdrawal
The Central Government may (a) revoke the rate or amount determined under sub-rule (2) by the Commissioner, or (b) direct the Commissioner to withdraw it.
Explanation
For rule 7, "place of export" means the customs station or any other place appointed for loading of export goods under section 7 of the Customs Act, 1962 from where the exporter exported or intends to export the goods.
Example: Coastal Rubber Works finds that the notified rate for its moulded rubber parts is well below the duty it paid on imported compounds. It has not yet claimed drawback on those exports. It applies to the Commissioner within three months with the proportion of imported compound and the duty paid. The Commissioner makes enquiries and, if the notified rate is in fact below eighty per cent of the amount determined, fixes a higher rate. Had Coastal already claimed at the notified rate, rule 7 would not be open for that claim. The cap under rule 9 still applies; see our article on rules 4, 5, 8 and 9.
Rule 10: power to require information and documents
For the purpose of:
- (a) determining the class or description of materials or components used, or the duty paid on them;
- (b) verifying the correctness of any information furnished by a manufacturer, exporter or other persons in connection with determining the amount or rate;
- (c) verifying the correctness of any drawback claim; or
- (d) obtaining any other information the Principal Commissioner or Commissioner considers relevant or useful,
any officer of the Central Government specially authorised by an Assistant or Deputy Commissioner may require any manufacturer, exporter or other person likely to be in possession to furnish information and produce books of account and other documents considered necessary by that officer.
Rule 11: access to the manufactory
Whenever a specially authorised officer considers it necessary, the manufacturer shall give access at all reasonable times to every part of the premises where the goods are made, so that the officer can verify by inspection the process and the materials or components used, or otherwise the entitlement of the goods to drawback or to a particular amount or rate.
| Rule | Power | Who exercises it | Duty on the exporter or manufacturer |
|---|---|---|---|
| 7 | Determine a higher rate where the notified one is low | Commissioner | Apply in time, state facts, offer bond if provisional |
| 10 | Require information and books | Specially authorised officer | Furnish and produce |
| 11 | Inspect premises | Specially authorised officer | Give access at reasonable times |
Practical checklist
- Compare the notified rate with the duty actually paid before claiming; once you claim, rule 7 is closed for that claim.
- Prepare an input-wise statement of materials, proportions and duty paid.
- Keep books and records ready for a rule 10 request.
- Arrange access to production areas on a rule 11 visit.
- Diarise the three-month window and extension routes.
For wider background, see our guide to duty drawback rates, claim process and brand rate and the Section 75 article.
Need help with a low drawback rate?
If the notified drawback on your product is far below your input duty and you have not yet claimed, timing matters. We can prepare the application and the verification file. Speak to our compliance advisory team.
Key takeaways
- Rule 7 applies when the notified rate is less than eighty per cent of duties paid and no claim has been made.
- The Commissioner can fix a higher rate only if the notified rate is in fact less than eighty per cent of his determination.
- Further provisional drawback needs a bond only for the difference.
- Specially authorised officers may require information and books under rule 10.
- Manufacturers must allow access at reasonable times under rule 11.
Read next
- Rule 6: brand rate where no rate is determined
- Rules 4, 5, 8 and 9: revision, date and upper limit
- Section 75 of the Customs Act, 1962
- 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.