Payment of interest in respect of delayed settlement of Duty Drawback payments -No provision in ICES?
AS per Section 75A(1) of the Customs Act, where any drawback payable to a claimant under section 74 or section 75 is not paid within a period of one month from the date of filing a claim for payment of such drawback, there shall be paid to that claimant in addition to the amount of drawback, interest at the rate fixed under section 27A from the date after the expiry of the said period of one month till the date of payment of such drawback.
Officers of the CBEC are generally averse to giving refunds, let alone interest. Interest is sacrilege. It seems in many Custom Houses, no interest is paid on delayed drawback.
This issue was raised in the Open House Meeting held by Mumbai Customs on 21.9.2015, where it was submitted that exporters are entitled to get their legitimate claim and that the Department should suo moto initiate necessary steps in paying interest if there is delay in processing drawback.
The Chief Commissioners informed the house that the issue of payment of interest in respect of delayed settlement of drawback be taken up with DG/Systems and initiate necessary steps to institutionalize the procedure.
The same issue was raised by the same Member in the Open House Meeting held by the same Mumbai Customs on 21.4.2016 and this time he submitted that the interest payment for delayed payment of drawback is not dependent upon the EDI system and the same can be made manually; therefore, the plea that the matter is taken up with the Systems Directorate does not absolve the officials from the interest payment liability in any case.
The Chief Commissioners informed that at present there is no provision in ICES 1.5system for payment of interest for delay in processing drawback claims. The issue is pending with DG(Systems).
Is this what you call, ‘ease of doing business'? Do you deny interest because your system does not know how to calculate it?