Section 74 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.
Section 74 lets a person who imported goods and paid duty on them get most of that duty back when the same goods are exported again. It applies to goods that can be easily identified, sets a time limit of two years from the date of payment of duty, and treats goods that have been used differently. This article explains the section as printed in the text on the CBIC portal updated to 30 March 2022.
When identifiable imported goods on which duty was paid are entered for export, or exported as baggage, or entered for export by post, ninety-eight per cent of the duty is repaid as drawback, if the goods are identified to the satisfaction of the officer as the goods imported and are entered for export within two years from the date of payment of duty on importation. The Board may extend the two years on sufficient cause. For goods that have been used after importation, the rate is fixed by the Central Government by notification.
The text consulted is the CBIC copy last updated on 30 March 2022 (the Act as amended up to the Finance Act, 2022). Later Finance Acts may have changed this section, so check it before acting.
What section 74 is for
Section 74 is headed "Drawback allowable on re-export of duty-paid goods". It sits in Chapter X, which deals with drawback. The companion provision, section 75, deals with drawback on imported materials used in making goods that are exported (see Section 75). For a general introduction to both, see our overview of duty drawback on exports, sections 74 and 75.
If you import and re-export goods, you will need an import-export code. Our page on IEC registration explains how we help with it.
Sub-section (1): when drawback is repaid
Sub-section (1) applies to goods capable of being easily identified which have been imported into India and on which any duty has been paid on importation. It then lists three routes to export.
| Route | What happens |
|---|---|
| (i) Entered for export | The proper officer makes an order permitting clearance and loading of the goods for export under section 51 |
| (ii) Exported as baggage | The owner, to clear it, makes a declaration of its contents to the proper officer under section 77 (the declaration is deemed an entry for export for this section), and the officer orders clearance for export |
| (iii) Entered for export by post | Under clause (a) of section 84, and the proper officer makes an order permitting clearance for export |
In each case ninety-eight per cent of such duty shall, except as otherwise hereinafter provided, be re-paid as drawback, if two further conditions are met:
- (a) Identification. The goods are identified to the satisfaction of the Assistant Commissioner of Customs or Deputy Commissioner of Customs as the goods which were imported.
- (b) Time. The goods are entered for export within two years from the date of payment of duty on the importation.
The reference to section 84 in route (iii) was substituted for a reference to section 82 with effect from 29-3-2018 by section 85 of the Finance Act, 2018 (13 of 2018). Section 82 is printed as omitted in this copy; see our article on sections 83 and 84.
Proviso: extension of time. In any particular case the period of two years may, on sufficient cause being shown, be extended by the Board by such further period as it may deem fit. The extension is not automatic: it needs sufficient cause and the Board's decision.
Example. Cobalt Instruments Pvt Ltd imports a measuring device and pays customs duty on it. Eighteen months later the foreign customer asks for it back for repair and the company decides to send it abroad. The goods carry a serial number, so they can be identified. If the company enters the goods for export within two years from the date of payment of duty, and the officer is satisfied that these are the goods that were imported, the section provides for ninety-eight per cent of the duty to be repaid, subject to sub-section (2) because the device has been used.
Sub-section (2): goods that have been used
Notwithstanding sub-section (1), the rate of drawback in the case of goods which have been used after importation shall be such as the Central Government, having regard to the duration of use, depreciation in value and other relevant circumstances, may, by notification in the Official Gazette, fix.
So used goods do not get the ninety-eight per cent as of right. The Act sets the factors (duration of use, depreciation in value and other relevant circumstances) but leaves the rate to a notification. This article states no such rate.
Sub-section (3): rules
The Central Government may make rules for carrying out the section. In particular the rules may:
- (a) provide for the manner in which the identity of goods imported in different consignments which are ordinarily stored together in bulk may be established;
- (b) specify the goods which shall be deemed to be not capable of being easily identified; and
- (c) provide for the manner and the time within which a claim for payment of drawback is to be filed.
This sub-section was inserted with effect from 26.05.1995 by the Finance Act, 1995 (22 of 1995). The footnote prints the year of the Act and the date.
Sub-section (4): two deeming rules
For the purposes of section 74:
- (a) goods are deemed to have been entered for export on the date with reference to which the rate of duty is calculated under section 16; and
- (b) in the case of goods assessed to duty provisionally under section 18, the date of payment of the provisional duty is deemed to be the date of payment of duty.
These rules matter for the two-year count. The clock runs from the date of payment of duty, and for provisional assessment that date is the date of payment of the provisional duty. Our article on provisional assessment under customs explains the assessment side.
The rules that implement section 74
The Re-export of imported goods (Drawback of Customs duties) Rules, 1995 are the rules that go with this section. The copy consulted for this series is dated 29 June 2017 (that is the date of that file, not of the Act text). Its contents list covers a procedure for claims on goods exported by post, the statements to be made on other exports, and the manner and time of claiming. Read the rules themselves for the steps; this article does not set them out.
Practical points
- Keep import proof. The officer must be satisfied that the goods are the ones that were imported, so keep the import documents and any serial or batch records.
- Watch the clock. Two years run from the date of payment of duty, not from the date of arrival of the goods.
- Disclose use. If the goods have been used, expect the rate to depend on a notification under sub-section (2).
- Choose the right route. Whether the goods go as an ordinary export, as baggage or by post decides which clause of sub-section (1) applies.
- File the claim as the rules require. Time and manner are matters for the rules made under sub-section (3).
Drawback of this kind is a customs-side refund of duty. Whether other claims, such as tax refunds on exports, can also be made is a different question; see our post on duty drawback and GST refund.
Need help with re-export?
Before you re-export duty-paid goods, make sure your export code and records are in place. We can help you with an IEC registration and with organising import proof so that a drawback claim under section 74 has a sound footing.
Key takeaways
- Section 74 applies to easily identifiable imported goods on which duty was paid.
- Drawback is ninety-eight per cent of the duty, if identified to the officer's satisfaction and entered for export within two years from the date of payment of duty.
- The Board may extend the two years on sufficient cause.
- Used goods get a rate fixed by notification under sub-section (2).
- Rules under sub-section (3) cover bulk identification, goods not easily identifiable, and the manner and time of claims.
- Later Finance Acts may have changed this section; check before acting.
Read next
- Section 75: drawback on imported materials used in exported goods
- Section 75A: interest on drawback
- Duty Drawback on Exports: Sections 74 and 75
- Duty drawback: rates, claim process and brand rate
Disclaimer: Based on the Customs Act, 1962 as published on the CBIC Tax Information Portal, updated to 30 March 2022 (amended up to the Finance Act, 2022), as consulted on 2 October 2026. Finance Acts of 2023 and later, and the current rules, regulations and notifications, should be checked. This article is general information, not legal advice; check the official text before acting.