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Business News/ Politics / Policy/  Government notifies new duty drawback rates for exporters
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Government notifies new duty drawback rates for exporters

Merchandise exports contracted in October for the first time this fiscal year, exerting pressure on the country's trade deficit, even as gold imports surged

Duty drawback is the refund of duties on imported inputs for export items. Photo: MintPremium
Duty drawback is the refund of duties on imported inputs for export items. Photo: Mint

New Delhi: In an attempt to boost overseas shipments, the government on Wednesday offered exporters a refund of the duty they pay on imports, after exports contracted for the first time in six months in October.

The ministry of finance notified the so-called duty drawback for the 2014-15 financial year.

“As before, the drawback rates have been determined on the basis of certain broad average parameters including, inter alia, prevailing prices of inputs, input-output norms, share of imports in input consumption, the applied rates of central excise and customs duties...which are used as input services in the manufacturing or processing of export goods...," it said.

Duty drawback is the refund of duties on imported inputs for export items.

India’s merchandise exports contracted in October for the first time this fiscal year, exerting pressure on the country’s trade deficit, even as gold imports surged. During the month, merchandise exports contracted 5% to $26 billion while imports grew 3.6% to $39 billion.

Although import growth was subdued, the trade deficit widened to $13.3 billion in October from $10.6 billion a year ago, according to the data released by the commerce ministry on Monday.

According to apex body Federation of Indian Export Organisations (Fieo), while there are no major changes in the new rates, small tweaks have been made in rates pertaining to sectors such as engineering goods, textiles, carpets and certain stationery items.

“More or less the rates have been retained and the trade and industry appreciate the efforts of the department," Fieo president M. Rafeeque Ahmed said.

He also said reduction in customs component rates of agriculture products, certain items of organic chemicals, footwear, ceramic products, knitted and crocheted garments, stone/cement does not seem to be warranted as there was no change in duty structure, he said.

Exports body Texprocil said the new drawback rates were positive and growth-oriented.

“Overall the rates for cotton textiles and the drawback caps have been increased," its chairman R.K. Dalmia said.

The new drawback schedule has incorporated additional categories of products such as flame retardant fabrics, some varieties of cotton yarn and cotton lycra yarn based on rising international demand.

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Published: 20 Nov 2014, 12:41 AM IST
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