Exporters hail increase in duty drawback rates

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Saurabh Gupta | 17 Sep, 2013
Exporters have welcomed the duty drawback rate rationalized for the year 2013-14, which brought more items under the scheme for tax refund to exporters to give a boost to overseas shipments.

"I am happy that government has announced duty drawback for the garment cotton, man-made and silk for the year 2013-14. This is a critical incentive which we all need because of our value added imports. I applaud the Government for the announcement at the times when rupees has been devalued to a considerable extent in recent times," Chairman AEPC, Dr A Sakthivel said Monday.

Dr Sakthivel thanked the Union Finance, Minister P Chidambaram for the help and blessings. Chairman AEPC termed it timely move. "This is a great encouragement for boosting the shipment from India, our need for the imported component will also be met to a great extent," he added.

Duty drawback allows the exporter to get back the duty paid on an item when it is exported. In order to boost export the new all industry Duty Drawback Rates for 2013-14 to be made effective from 21st September for various export products group.

The exporters' body welcomed the increase in rates for some handicraft items, silk garments, fabrics and yarn, gold and silver jewellery and also bringing milk products under drawback as exports growth in dairy sector has been encouraging.

Welcoming the move, Chairman EPCH, Lekhraj Maheshwari said, "The Export Promotion Council for Handicrafts (EPCH) welcomes the increase in Duty drawback rates in some of the handicrafts items however was expecting higher rates in some other items."

The duty drawback rates for wooden frames, tableware and kitchenware of wood, wood marquetry, art-ware of wood, paper machine products, embroidery of silk, hand-cut crystal glassware and imitation jewellery have been increased, however, for the remaining handicraft items rates have either been kept the same as last year or have been reduced marginally.

"It is an important benefit given to the handicrafts exporters, the exports are picking up and such an incentive at this juncture would certainly boost the morale of the handicrafts exporters, however some more could have been done to lift the spirits of the exporters," said Rakesh Kumar, Executive Director, EPCH.

Among others, the drawback rates are garment cotton now will be 7.6 percent, man made will be 10.2 percent, silk 7.8 percent (from 7 per cent), leather shoes 9.1 percent (9.2 percent), leather sandals 8.1 percent (8.2 percent), sports shoes 3 percent (4 percent), tractors 1.7 percent (2 percent), car components 7.2 percent (7.5 percent).

The government had taken into account the recommendations of the committee headed by Planning Commission Member Saumitra Chaudhuri who is also Member of the Prime Minister's Economic Advisory Council.

Under Indian Customs Act, various schemes like EOU, SEZ, Advance Authorisation, manufacture under bond etc., are available to obtain inputs without payment of customs duty/excise duty or obtain refund of duty paid on inputs.

The apex exporters body, Federation of Indian Export Organisations (FIEO) also welcomed the government's move to rationalise duty drawback rates to boost shipments but asked for a review of the rates related to the electronic sector.

President, FIEO, M Rafeeque Ahmed welcomed the Drawback Rates, but ask for review for Electronic Sectors Responding to Duty Drawback rates.

He expressed concern over the sharp decline in drawback rates for electronic sectors. "By and large Drawback rates are on expected lines as generally the decline are in the range of 0.1 percent to 0.5 percent with few exceptions," Ahmed said in a press statement.