Duty Drawback rates

The Finance Ministry increased drawback rates in the for certain items in the textiles sector. However, the exporters expressed disappointment over the move, stating that the duty drawback increase was “too little too late”.  Under duty drawback scheme, customs duty, excise duty and service tax paid on inputs are refunded to the exporter of finished products.

While releasing the third package of rupee appreciation relief measures, the Finance Minister, Mr P Chidambaram had told Parliament that he had asked councils to provide inputs to the drawback committee.

Reacting to the latest changes in the drawback rates on textile items, Mr Ganesh Kumar Gupta, President of Federation of Indian Export Organizations (FIEO), an export promotion body, said that the enhancement does not offset the losses from appreciation of rupee and would “hardly increase the competitiveness of the textiles sector”.

He said the industry had demanded an increase of 4%-5% in the drawback rates. FIEO has urged the Finance Ministry to further enhance drawback rates by 3% for textiles sector between 4% to 5% for other sectors using indigenous inputs.