NEW DELHI: The Union Government on Thursday announced increased duty drawback rates that would take into account service tax and bring in 84 new items that would be entitled to refund of taxes paid while producing the goods for exports.

The rates, which will be effective from July 15, have been decided on the basis of recommendations of a committee headed by Saumitra Chaudhuri, Member of the Economic Advisory Council to Prime Minister.

"The committee held extensive consultations with various industry and trade associations and other stakeholders at various locations and submitted its report on June 15. The Government has accepted the drawback rates as suggested by the committee,'' an official release said here.

"The drawback rates would now also take into account the incidence of service tax paid on taxable services, which are used as input services in manufacturing or processing of export goods,'' the release added.

Apart from service tax, the education cess on excise and customs and incidence of duty on high-speed diesel and furnace oil have been factored in the drawback calculation. For this the Customs and Central Excise Duties Drawback Rules 1995 have been suitably amended.

New items in list

The 84 new items that have been included in the Drawback Schedule include cotton bags, leather caps, aluminium artware, plastic suitcases, handbags of plastics, tractor parts, compressors, and some sports equipment.

In the case of silk, the drawback rate for higher quality silk fabrics has been increased to 8.3 per cent with a drawback cap of Rs. 250 a kg from 7.5 per cent with a drawback cap of Rs. 140 a kg.

Cotton yarn

The new drawback rate for grey cotton yarn of less than 60 counts is four per cent with a cap of Rs. 8 a kg as against the existing rate of 3.5 per cent with a cap of Rs. 7 a kg.

The new rate for dyed cotton yarn of less than 60 counts is five per cent with a cap of Rs. 13.30 a kg. In respect of cotton yarn of 60 counts and more, a higher rate of 6.8 per cent / 7.8 per cent with a cap of Rs. 20.40 a kg/Rs. 26 a kg depending on whether the yarn is grey or dyed.

As for cotton fabrics, the new rate is 4.7 per cent for grey with a drawback cap of Rs. 14 a kg and 5.7 per cent for dyed with a drawback cap of Rs. 20.50 a kg.

In the readymade garment sector, the new drawback rate for knitted blouses, shirts, tops of cotton is 6.7 per cent with a cap of Rs. 29 a piece as against the existing rate of 6 per cent with a cap of Rs. 25 a piece.

The new rate for knitted blouses, shirts, tops of man-made fibre is 7.8 per cent with a cap of Rs. 32 a piece as against the existing rate of 7.5 per cent with a cap of Rs. 30 a piece.

For knitted blouses, shirts, tops of cotton and man made fibre blend, the new drawback rate is 7.2 per cent with a cap of Rs. 30 a piece as against the existing rate of 6.8 per cent with a cap of Rs. 28 a piece. The drawback rates on woven garments have been revised accordingly.

The new drawback rate for finished leather is 6.6 per cent with a cap of Rs. 7 per sq. ft. as against the existing rate of 6.3 per cent with a cap of Rs. 5 per sq. ft. The new drawback rate for leather footwear for adults is 9.5 per cent with a cap of Rs. 85 per pair as against the existing rate of 8.3 per cent with a cap of Rs. 70 per pair.

In the case of leather apparels the rate provided is 9.5 per cent with a cap of Rs. 533 a piece as against the existing rate of 7.5 per cent with a cap of Rs. 400 a piece. The drawback rates on other leather items like suitcases, handbags and gloves have also been revised upwards.

Steel products

The new drawback rates for semi-finished steel, HR coils, CR sheets, GP sheets and bars and rods are in the range of 2.7 per cent to 3.7 per cent with drawback caps varying from Rs. 625/tonne to Rs. 1,000/ tonne.

In the case of stainless steel utensils, the rate has been revised upwards from 11 per cent to 15 per cent with varying caps depending upon the quality of utensils. — PTI

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