Fresh sops to exporters

By Our Special Correspondent

NEW DELHI, OCT. 4. With exports continuing to slide in the recent months, the Finance Ministry today decided to increase the rate of duty drawback on 300 product groups that had been reduced by 20 per cent earlier this year. The increase now is 10 per cent, which will mean the overall decrease this year would be only 10 per cent as compared to the rates last year. The fresh rates come into effect from today.

Another industry-facilitation measure announced by the Government today was the abolition of the duty entitlement pass book (DEPB) value caps in respect of 400 items that were covered by the DEPB schedule. This measure is expected to give a boost to exports of engineering, chemical, textiles and other products, but the Government also announced that the abolition of value caps was being done as a one-time measure for promoting exports and the policy would be reviewed after March 31, 2002.

The third export-promotion measure announced is in regard to the residuary category of capital goods and machinery available in the drawback table. This drawback rate has been revised to 5 per cent of the f.o.b. value and is expected to give a fillip to the export of engineering goods.

According to an official press note, the changes have been announced keeping in view the prevailing world economic scenario and stiff competition. The duty drawback system compensates the exporter for the domestic duties and levies that are paid on inputs used for export production.

PTI reports:

A 10 per cent cut in drawback rates was essential due to the abolition of 10 per cent surcharge of basic customs duty, the release adds.

The industry has also been representing against the DEPB value caps which, they said, were a hindrance for growth of exports of high value added products, it said.

The Government had made a downward revision in duty drawback for over 700 items while making specific entries with separate drawback rates and individual drawback caps in June 1.

The new schedule of the all industry duty drawback was around 4- 4.5 per cent lower than the earlier rates leading to strong protests particularly by exporters of garment, leather and handicraft sectors.

Following the representation by the industry, the Government partially rolled-back the new rates on June 22 with retrospective effect. However, the industry continued to demand a total roll- back to the old rates in view of the decline in exports.

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