A BRIEF NOTE ON COMPARISON BETWEEN REBATE AND REFUND OF DUTY

A BRIEF NOTE ON COMPARISON BETWEEN REBATE AND REFUND OF DUTY UNDER THE INDIRECT TAXATION

Rule 18 of the Central Excise Rules, 2002 provides for Rebate of duty, it states that Central Government may by notification in the official gazette grant rebate of Duty paid on excisable goods (Final goods), or duty paid on material (input) used in manufacturing process or manufacture of goods.

However the same is subject to some conditions or limitations and procedure. Government has issued a notification in which it has specified the conditions and procedure to be followed to claim rebate of duty. (Please refer Notification No. 19/2004 and 42/2001 for condition and procedure)

For instance: In case, an item has been manufactured in India and excise duty on the same has been paid by the manufacturer and in case this item is exported then exporter can claim rebate of duty. Therefore, it can said that person who bear the burden of duty (i.e., manufacturer) and the person (i.e., 

Exporter) who actually claim the rebate may be different. Rebate is a synonym of refund.

All provision regard rebate of duty has been articulated as under:

On the other hand, Refund of duty has been prescribed under Section 11B of the Central Excise Act, 1944. The definition of refund includes rebate of duty on excisable goods which are exported outside India.

Refund of duty can be claimed on import as well as export of goods, there are certain circumstances like duty paid in excess of what was actually leviable, when duty is provisionally assessed and in case of pilferage (petty theft) of goods.

The Application of refund shall be filed within 1 year in specified Form to AC/DC from the relevant date.

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