Section 75A 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 75A works in two directions. If the Government delays paying a drawback claim, it must pay the claimant interest. If a drawback has been paid in error, or is otherwise recoverable, the claimant must pay interest back along with the amount. This article explains the section as printed in the text on the CBIC portal updated to 30 March 2022.
If drawback under section 74 or section 75 is not paid within one month from the date of filing the claim, the claimant is paid interest in addition, at the rate fixed under section 27A, from the day after the month ends till the date of payment (sub-section (1)). If drawback is paid erroneously or becomes otherwise recoverable, the claimant must pay it back within two months from the date of demand, with interest at the rate fixed under section 28AA, counted from the date of payment of the drawback till recovery (sub-section (2)). The rates are not in the Act.
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.
Where section 75A fits
Section 75A was inserted by section 62 of the Finance Act, 1995 (22 of 1995), with effect from 26.05.1995, as the footnote prints. It follows the two drawback-granting sections of Chapter X: Section 74 (re-export of duty-paid goods) and Section 75 (imported materials used in exported goods). If you want a general introduction to the whole subject, read our overview of duty drawback on exports, sections 74 and 75.
If a drawback claim has been delayed or demanded back, a lawyer's view of the facts may help. See our legal consultation page.
Sub-section (1): interest payable to the claimant
Sub-section (1) applies to any drawback payable to a claimant under section 74 or section 75.
| Element | What the text says |
|---|---|
| Trigger | The drawback is not paid within a period of one month from the date of filing a claim for payment of the drawback |
| What is added | Interest, in addition to the amount of drawback |
| Rate | The rate fixed under section 27A |
| Start of interest | The date after the expiry of the one-month period |
| End of interest | The date of payment of the drawback |
The period has changed over time, as the footnotes show. It was "three months" until the Customs (Amendment) Act, 1998 (8 of 1999) with effect from 08.01.1999 changed it to two months, and the Finance Act, 2003 (32 of 2003) substituted "one month" with effect from 14.05.2003. A proviso that followed the sub-section was omitted by the same 2003 Act. The one-month period is the one in the live text.
The section does not state the rate. It refers to the rate "fixed under section 27A", and a rate fixed under another section is outside this text. This article states no rate.
Note what the sub-section does not say. It does not say who must process the claim, how a claim is filed, or what counts as "payable". Those are matters for section 74(3), section 75(2) and the rules under them. The sub-section simply attaches interest to delay once a claim has been filed.
Example. Orbit Components Pvt Ltd files a drawback claim on 5 June. The drawback is paid on 20 July. The month ended on 5 July, so interest runs from 6 July, the date after expiry of the period, until 20 July, the date of payment, at the rate fixed under section 27A.
Sub-section (2): interest payable by the claimant
Sub-section (2) deals with drawback that "has been paid to the claimant erroneously or it becomes otherwise recoverable under this Act or the rules made thereunder".
In that case the claimant shall:
- Pay the drawback back within two months from the date of demand, and
- pay, in addition, interest at the rate fixed under section 28AA.
The interest is calculated for the period beginning from the date of payment of such drawback to the claimant till the date of recovery of the drawback.
This is a wider sub-section than its older form. The footnote shows that sub-section (2) was substituted by the Finance Act, 2007 (22 of 2007) with effect from 11.05.2007, and that the earlier text covered only drawback paid "erroneously" and counted interest from the end of the two-month period. The live text also covers drawback that becomes otherwise recoverable, and counts interest from the date of payment of the drawback. The words "section 28AA" replaced "section 28AB" with effect from 08.04.2011 by the Finance Act, 2012 (23 of 2012). Section 28AB is printed as omitted in this copy.
Three details to notice:
- The interest period starts from the date the claimant received the drawback, not from the date of the demand.
- The two months run from the date of demand. That period is for paying back the amount; interest runs for the whole period from payment to recovery.
- "Otherwise recoverable" ties to section 75(1)'s second proviso, under which drawback is deemed never to have been allowed where sale proceeds are not received in time, and to the recovery procedure the rules specify. Sub-section (2) of section 75A applies in any case where the Act or the rules make the drawback recoverable.
Example. Orbit Components Pvt Ltd received drawback on 10 March. A demand for recovery is made on 1 September. Interest at the rate fixed under section 28AA is calculated for the period beginning 10 March until the date the drawback is recovered, and the amount of drawback is to be paid within two months from 1 September.
The two rates compared
| Direction | Who pays | Rate fixed under | Runs from | Runs to |
|---|---|---|---|---|
| Delay in paying drawback | Government to claimant | Section 27A | Day after one month from filing | Date of payment |
| Erroneous or recoverable drawback | Claimant to Government | Section 28AA | Date of payment of drawback | Date of recovery |
The two rates are drawn from different sections and so may differ. Whatever they are, the Act itself prints neither. Check the notification applying to the section concerned.
Practical points
- Note the filing date. Interest for delay depends on the date of filing the claim, so keep proof of filing.
- Diarise two months from any demand. Sub-section (2) gives two months to pay the amount back.
- Compute interest from payment, not from demand. For recovery cases, the interest period starts when the drawback was paid to you.
- Know the recovery triggers. Drawback may be recoverable under the Act or under the rules; check both.
- Do not assume the rate. Both rates come from other sections and notifications.
For a view on how drawback compares with other export incentives, see duty drawback versus RoDTEP. Section 76, which bars or restricts drawback in certain cases, is explained in our article on section 76.
Need help with a drawback dispute?
If a drawback claim is delayed, or a demand for recovery with interest has arrived, our team can help you read the text and plan your response. Start with our legal consultation page.
Key takeaways
- Section 75A has two parts: interest to the claimant for delay, and interest from the claimant on drawback paid erroneously or recoverable.
- Delay interest starts the day after one month from filing the claim and runs till payment, at the rate fixed under section 27A.
- Recovery interest runs from the date of payment of the drawback till recovery, at the rate fixed under section 28AA, and the amount is to be paid within two months from the demand.
- Neither rate is stated in the Act.
- Later Finance Acts may have changed this section; check before acting.
Read next
- Section 74: drawback on re-export of duty-paid goods
- Section 75: drawback on imported materials used in exported goods
- Section 76: when drawback is prohibited or restricted
- 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.