Differences between cash assistance and duty drawback

The important differences between cash assistance and duty drawback are given below:

1. Meaning:

  • Cash assistance is one of the incentives given to the exporter. Generally, cash assistance is given on FOB value of goods, thereby enabling the exporter to charge a lower price in the overseas market.
  • Duty drawback is also an important form of export incentive. It is simply a refund of duty already paid on raw material or components imported by the manufacturer of export product.

2. Basis of Calculation

  • Cash assistance is calculated on the basis of F0B price as a percentage of value.
  • In duty drawback, the calculation is based on the actual duty paid on the imported raw material and component which are subsequently used for manufacturing export product.

3. Timing of Payments:

  • Cash assistance is paid only after the goods are exported.
  • Duty drawback is allowed on goods imported, manufactured and exported.

4. Effect

  • Cash assistance has the effect of reducing the price charged by the exporter in the overseas market.
  • Duty drawback has the effect of reducing cost and so it brings down the price for export product.

5. Benefit

  • Cash assistance is a benefit directly available to the exporter.
  • Duty drawback claims are submitted to the Directorate of Duty drawback (customs).

6. Claims:

  • Cash assistance is claimed from the Controller of imports and exports for approval.
  • Duty drawback claims are submitted to the Directorate of Duty drawback (customs).

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