The Hindu : Business : Substantial mark-up in duty drawback rates

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Saturday, Jul 14, 2007
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Substantial mark-up in duty drawback rates

Ashok Dasgupta

New rates to take effect from April 1

NEW DELHI: The new all-industry rates of duty drawback, unveiled on Thursday as part of the comprehensive package for exporters, mark a substantial revision in the level of compensation being extended to various sectors to neutralise the adverse effects of the appreciating rupee. The increased rates of drawback, to be notified in the Official Gazette shortly, are to take effect from April 1 this year.

With all taxes and price variables taken into account, the drawback rates have undergone significant changes correspondingly.

In the case of silk, for example, the drawback rate for higher quality silk fabrics has been increased from 8.3 per cent with a drawback cap of Rs.250 a kg. to 10.8 per cent with a cap of Rs.325 a kg.

The new drawback rate for dyed cotton yarn of less than 60 counts is 6.5 per cent with a cap of Rs. 18 a kg., while for cotton yarn of 60 counts and more, a higher rate of 8.8-9.9 per cent with a cap of Rs.26-33 a kg has been fixed, depending on whether the yarn is grey or dyed.

As for cotton fabrics, the new rate is 6.4 per cent (grey)/7.7 per cent (dyed) with a drawback cap of Rs. 19 a kg (grey)/Rs.28 a kg (dyed).

The new drawback rate for hand-knotted woollen carpets is 12.5 per cent with a cap of Rs. 700 per sq. metre as compared to 9.4 per cent and Rs. 565 per sq. metre.

For silk carpets, the new rate is 15.5 per cent with a cap of Rs. 2,750 per sq metre as against 11.8 per cent and Rs. 1,600 per sq. metre. For cotton durries, the new rate is 11.5 per cent with a cap of Rs. 26 a kg as compared to 9.4 per cent and Rs. 20 a kg.

In the readymade garment sector, the new drawback rate for knitted cotton blouses/shirts/tops is 10 per cent with a cap of Rs. 48 a piece and that for the same in man-made fibre is 11.5 per cent with an identical cap. In the made up category, the new drawback rate for bed linen, table linen, toilet linen, kitchen linen and curtains of cotton is 9.1 per cent with a cap of Rs. 110 a kg as compared to 6.4 per cent and Rs. 64 a kg.

Similarly, the new rates for made-ups of manmade fibres and made-ups of silk/wool have been revised upwards to 10.4 per cent and 9.8 per cent respectively.

The new drawback rate for finished leather is 7.5 per cent with a cap of Rs. 8 per sq. ft. as against the existing rate of 6.6 per cent with a cap of Rs.7 per sq. ft. Likewise, the new drawback rate for leather footwear for adults is 11.5 per cent with a cap of Rs. 105 a pair as compared to 9.5 per cent and Rs. 85 a pair.

For leather apparels, the new rate is 11.4 per cent with a cap of Rs. 650 a piece as compared to 9.5 per cent and Rs. 533 a piece.

Some additional lines have also been introduced in the drawback schedule.

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