Section 75 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 75 is the main drawback provision for manufacturers and processors who use imported materials in goods that they then export. It lets the Central Government direct, by notification, that drawback be allowed of customs duty on those materials, in accordance with rules, and it adds two provisos and a power to make rules. This article explains the section as printed in the text on the CBIC portal updated to 30 March 2022.
Where it appears to the Central Government that drawback should be allowed of customs duty on imported materials used in goods that are manufactured, processed or otherwise operated upon in India and then exported, it may notify that drawback shall be allowed, in accordance with the rules made under sub-section (2). No drawback is allowed on specified goods whose export value is too low against the imported materials, and where sale proceeds are not received within the time allowed under the Foreign Exchange Management Act, 1999, drawback is deemed never to have been allowed, except in circumstances the rules specify.
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.
Place of section 75 in the drawback scheme
Chapter X of the Act has four sections on drawback: section 74 (re-export of duty-paid goods), section 75 (this section), section 75A (interest) and section 76 (prohibition and regulation). Read this section together with Section 74 and with our general overview of duty drawback on exports, sections 74 and 75.
Drawback is claimed by exporters, so an import-export code is needed. Our page on IEC registration explains how we help.
Sub-section (1): the notification power
The Central Government acts where "it appears" that, for goods of any class or description, a drawback should be allowed. The goods must be:
- manufactured, processed or on which any operation has been carried out in India, and
- either entered for export with an order permitting clearance and loading for export under section 51 by the proper officer, or entered for export by post under clause (a) of section 84 with an order permitting clearance for export.
The drawback is of duties of customs chargeable under this Act on any imported materials of a class or description used in the manufacture, processing, or operation on such goods. The Central Government may, by notification in the Official Gazette, direct that drawback shall be allowed in respect of such goods in accordance with, and subject to, the rules made under sub-section (2).
Two features are worth noting. First, the section does not itself give any exporter a right to a fixed sum: the right arises through a notification and the rules. Second, the words "manufactured, processed or on which any operation has been carried out" were substituted for "manufactured in India" with effect from 26.05.1995 by the Finance Act, 1995 (22 of 1995), so the section covers more than pure manufacture. The footnotes show the reference to section 84 replaced a reference to section 82 with effect from 29.03.2018 (Finance Act, 2018). This article states no drawback rate and no notification.
First proviso: low export value
No drawback shall be allowed under sub-section (1) on goods that the Central Government may, by rules made under sub-section (2), specify, if the export value of the goods or class of goods is less than the value of the imported materials used, or is not more than such percentage of that value as the Central Government may specify by notification. The proviso was inserted by the Finance (No.2) Act, 1991 (49 of 1991) with effect from 27.9.1991.
Second proviso: sale proceeds not received
Where drawback has been allowed on any goods under sub-section (1) and the sale proceeds are not received by or on behalf of the exporter in India within the time allowed under the Foreign Exchange Management Act, 1999 (42 of 1999), the drawback shall, except under such circumstances or such conditions as the Central Government may by rule specify, be deemed never to have been allowed. The Central Government may, by rules, specify the procedure for recovery or adjustment of the amount. The exception words were inserted with effect from 8-4-2011 by section 46 of the Finance Act, 2011 (8 of 2011).
Example. Meridian Textiles Pvt Ltd exports garments made from imported fabric and a notification allows drawback for goods of that description. It receives drawback. The buyer abroad does not pay within the time allowed under the Foreign Exchange Management Act, 1999. Unless the rules provide an exception, the drawback is deemed never to have been allowed and recovery or adjustment follows under the procedure the rules specify.
Sub-section (1A): imported material in excess of material used
Where it appears to the Central Government that the quantity of a particular material imported into India is more than the total quantity of like material used in goods manufactured, processed or operated upon in India and exported, the Central Government may by notification declare that so much of the material as is contained in the goods exported shall, for the purposes of sub-section (1), be deemed to be imported material. This sub-section was inserted with effect from 01.07.1978 by an Act of 1978 (25 of 1978), as the footnote prints.
Sub-section (2): rules
The Central Government may make rules for carrying out sub-section (1). The text lists matters the rules may cover:
| Clause | Subject of the rules |
|---|---|
| (a) | Payment of drawback equal to the amount of duty actually paid on imported materials, or as specified in the rules as the average amount of duty paid on materials of that class or description, and interest if any payable |
| (aa) | Specifying goods on which no drawback shall be allowed |
| (ab) | Procedure for recovery or adjustment of drawback allowed, or interest chargeable |
| (b) | Production of certificates, documents and other evidence in support of each claim |
| (c) | Access for specially authorised officers to every part of the manufactory to inspect processes and verify statements made in support of the claim |
| (d) | The manner and the time within which the claim may be filed |
The Assistant Commissioner or Deputy Commissioner of Customs authorises the officer for clause (c).
Sub-section (3): retrospective drawback
The power to make rules includes the power to give drawback with retrospective effect from a date not earlier than the date of changes in the rates of duty on inputs used in the export goods.
The rules that implement section 75
The Customs and Central Excise Duties Drawback Rules, 2017 are the rules that go with this section. The copy consulted for this series is dated 21 September 2017 (that is the date of that file, not of the Act text). Its contents list includes information to be furnished, cases where a rate has not been determined, access to the manufactory, and the manner and time of claiming. This article does not set out any rule-wise detail.
What exporters should keep in mind
- Check the notification first. Drawback under section 75 exists only where a notification and rules allow it for the goods.
- Track realisation. The second proviso ties drawback to receipt of sale proceeds within the time allowed under FEMA.
- Keep evidence. The rules may require certificates, documents and access to the factory.
- Mind the filing window. The manner and time of the claim are matters for the rules under sub-section (2)(d).
For how drawback sits beside other export incentives, see duty drawback versus RoDTEP. Interest on delayed or erroneous drawback is dealt with in Section 75A.
Need help getting export-ready?
A drawback claim begins with a valid export code and clean records of inputs and sale proceeds. We can help you with IEC registration and with setting up the paperwork an exporter will need.
Key takeaways
- Section 75 operates through a notification of the Central Government and rules under sub-section (2); it does not fix an amount itself.
- It covers goods manufactured, processed or otherwise operated upon in India and exported or entered for export by post.
- The first proviso bars drawback on specified goods when export value is too low against imported materials.
- The second proviso deems drawback never allowed where sale proceeds are not received within the time allowed under FEMA, unless rules specify otherwise.
- Sub-section (1A) lets the Government deem part of excess imported material to be contained in exported goods.
- Later Finance Acts may have changed this section; check before acting.
Read next
- Section 74: drawback on re-export of duty-paid goods
- Section 75A: interest on drawback
- Section 76: when drawback is prohibited or restricted
- Duty Drawback on Exports: Sections 74 and 75
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.