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Regular-article-logo Wednesday, 17 December 2025

DRAWBACK RATES FOR 850 ITEMS REVISED 

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OUR BUREAU & PTI Published 01.06.02, 12:00 AM
New Delhi, June 1 :    New Delhi, June 1:  Duty drawback, an export incentive to compensate duty borne on imported inputs, was today revised for about 850 items in the face of changes in customs duty in the Union budget. Of the 850 items, duty drawback was reduced in case of 450-500 items, revised upwards in the case of 200-250 items and unchanged in the case of over 50 items, drawback commissioner S.S. Renjhen said. The all-industry duty drawback rates are revised every year 90 days after the duty changes are announced in the budget. Though duty on non-ferrous metals was reduced by over 30 per cent cumulatively, the government has ensured that decrease in duty drawback was not that steep in exportable items using these raw materials including handicrafts in view of the difficult export scenario. In addition to the revision of the existing categories, around 50 new categories have been introduced in the drawback schedule, Renjhen said. Renjhen also pointed out that no changes had been effected in the case of leather even though the import duty had been reduced from 35 to 30 per cent as leather is a major item of export. There were also no changes for bicycle components as very little imported materials were used in their manufacture. Reduction in case of knitted garments was 0.5 per cent while in case of woven garments it was 2.5 per cent, he said adding the cut in textiles drawback ranged from 0.5 per cent to 20 per cent. Following the government's decision to levy excise duty on hank yarn, the drawback rates for handloom products had been revised upwards, he said. Asked if the government would re-consider some of the drawback rates, Renjhen said, 'the drawback rates have been announced based on the inputs provided by the concerned councils'. 'As of now there is no such demand from any quarter for a revision,' he said adding as drawback rates are worked out in consultation with the councils the question of a revision did not arise. Exporters upset Meanwhile, exporters have said the cut in drawback rates, particularly for woven and knitted garments, could lead to a 15-20 per cent decline in exports in value terms and that they would approach the government early next week seeking a reconsideration. 'The 2.5 per cent cut in drawback rate for woven and 0.5 per cent cut in case of knits is bound to have a dampening effect on exports which could witness a decline of as much as 15-20 per cent in value terms,' senior vice-chairman of the Apparel Export Promotion Council Rajendra Hinduja said. Describing the cut in duty drawback as a severe setback, he said the council would approach the government early next week seeking a re-consideration of the duty, particularly in view of the dismal export scenario. With exports already down by around 15 per cent in 2001-02, maintaining the current level of Rs 30,000 crore of apparel exports might now become very difficult, he said, adding that reconsideration of duty drawback rates was needed to ensure exports remained competitive with respect to China and other countries. Hinduja said the reduction in drawback has come despite data submitted by the council that supported continuation of duty drawback at around 14.5 per cent for apparels. K.L. Madan, chairman, Garment Exporters' Association, said commitments made by the Indian exporters for the next few months would suffer and exports would become non-competitive as prices would go up by around 2-2.5 per cent. 'Keeping in view the present export scenario we were hoping the government would maintain the duty at the present level,' he said. Madan said exports in value terms could decline by around 10-15 per cent.    
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