Govt revises all industry rates of duty drawback

New Delhi, July 13: The Finance Ministry today announced the revised all industry rates of duty drawback effective from July 15.

According to a notification issued today, the Drawback Schedule includes 84 new items ranging from cotton bags, leather caps, aluminium artware, suitcases, plastic handbags, tractor parts, compressors, table tennis tables and other sports equipment/accessories.

The new drawback rate for hand-knotted woollen carpets is 9.4% with a cap of Rs 565 per sqm against the existing rate of 8% with a cap of Rs 315 per sqm. For silk carpets, the new drawback rate is 11.8% with a cap of Rs 1,600 per sqm against the existing rate of 10% with a cap of Rs 1,080 per sqm. The drawback rate on cotton durries is fixed at 9.4% with a cap of Rs 20 a kg as against the existing rate of 8% with a cap of Rs 16 a kg.

In the readymade garment sector, the new drawback rate for knitted blouses/shirts/tops of cotton is 6.7% with a cap of Rs 29 per piece against the existing rate of 6% with a cap of Rs 25 per piece. The new rate for knitted blouses/shirts/tops of man-made fibre is 7.8% with a cap of Rs 32 per piece against the existing rate of 7.5% with a cap of Rs 30 per piece. For knitted blouses/shirts/tops of cotton and man made fibre blend, the new drawback rate is 7.2% with a cap of Rs 30 per piece against the existing rate of 6.8% with a cap of Rs 28 per piece.

Under the revised drawback rates on woven garments, in the made up category, the new drawback rate for bed linen, table linen, toilet linen, kitchen linen and curtains of cotton is 6.4% with a cap of Rs 64 per kg (existing rate of 5% with a cap of Rs 50 per kg). The new drawback rates on made-ups of manmade fibres and made-ups of silk/wool have also been revised upwards.

The new rates are 7.5% and 6.9% respectively against the existing rate of 6%.

The new drawback rate for finished leather is 6.6% with a cap of Rs 7 per sq ft as against the existing rate of 6.3% with a cap of Rs 5 per sq.ft. Likewise, the new drawback rate for leather footwear for adults is 9.5% with a cap of Rs 85 per pair against the existing rate of 8.3% with a cap of Rs 70 per pair. In the case of leather apparels the rate provided is 9.5% with a cap of Rs 533 per piece as against the existing rate of 7.5% with a cap of Rs.400 per piece. The drawback rates on other leather items viz. suit cases, handbags and gloves have also been revised upwards.

For semi-finished steel, HR Coils, CR Sheets, GP Sheets and bars&rods, the new drawback rates are in the range of 2.7% to 3.7% (all customs) with drawback caps varying from Rs 625/MT to Rs 1000/MT. In the case of stainless steel utensils, the rate has been revised upwards from 11% to 15% with varying caps depending upon the quality of utensils.

In view of reduction in the duty on copper concentrates, the drawback rates on copper cathodes, wire bars and rods have registered a decrease from 5% to 2.2%. Taking into account the duty incidence and prices of inputs, the drawback rate on brass builder hardware and handicrafts of brass has been increased from 11% with a cap of Rs 33 a kg to 15% with a cap of Rs.75 a kg.

Same is the case with artware/handicrafts of copper where the drawback rate has been increased from 11% with a cap of Rs 44 a kg to 15% with a cap of Rs 110 a kg.

In the case of stainless steel cutlery falling under Chapter 82, the drawback rate has been increased to 15% in line with duty drawback on stainless steel utensils. Similarly, brass hardware items and other such items under chapter 83 where the drawback rate is being provided at 15% on par with brass handicrafts.

The drawback rate on ball point pen has been increased from 6% (all customs) with a cap of Rs 65 per 100 pcs to 7% with a cap of Rs 75 per 100 pcs. The drawback rate on felt tipped pen has also been increased from 11% with a cap of Rs 180 per 100 pieces to 12% with a cap of Rs 200 per 100 pieces.

Taking into account the duty incidence and prices of inputs the drawback rates (Customs component) on 24 dyestuffs, 20 dye intermediates and 5 polymers have been revised upwards by 2%-3%.

In the case of zinc oxide - IP/BP/USP Grade, the new drawback rate is 5.5% (customs) against the present rate of 9.6% [5.7% (excise component) + 3.9% (customs component)].

After examination of the cost data, for the first time a drawback rate of Rs 1,050/MT (all customs) has been provided in the Drawback Schedule in respect of Furnace Oil and HSD supplied by domestic oil companies to the Units located in SEZs.

In the wake of switchover to HS classification system, three products, that is, cotton handbags, leather caps and plastic combs became ineligible for drawback. Drawback rates now being prescribed at the rate of 6.4% on cotton bags, 7% on leather caps and 11% on plastic combs. Having regard to the difficulties being faced by the exporters, the Government has decided to release drawback on cotton handbags, leather caps and plastic combs at the rate of 5% with a cap of Rs 50 a kg, 5% with a cap of Rs 100 a kg and 10.5% with a cap of Rs 6.8 a kg respectively effective from May 5, 2005 and up to July 14.

The Customs has already implemented EDI at 34 major customs locations covering about 85% of the imports and exports. Under the system, the shipping bill itself is treated as the claim for drawback.

The drawback claim is processed on line and the amount is credited into the exporter's account in the bank designated by the Customs immediately after "let export order" and filing of manifest by the carrier without any additional paper work. Commissioners have also been instructed to ensure that all grievances or problems raised by exporters on drawback claims are addressed within 72 hours and, if this is not possible in any case, to bring the matter to the notice of Member (Customs/Export Promotion) in CBEC. Exporters may also bring any delay beyond 72 hours to the notice of Member (Customs/Export Promotion).

The Ministry had constituted a three-member committee to determine the drawback rates, comprising Mr Saumitra Chaudhuri, Member, Economic Advisory Council to Prime Minister as Chairman, Mr S B Mohapatra, former Secretary, Ministry of Textiles and Mr T R Rustagi, former Chief Commissioner of Customs&Central Excise.

The Government has accepted the drawback rates as suggested by the Committee which held extensive consultations with various industry and trade associations and other stake holders in various locations and submitted its report on June 15 last.

Like the previous year, the drawback rates have been determined on the basis of certain broad parameters including, inter alia, the prevailing prices of inputs, standard input/output norms (SION) published by DGFT, share of imports in the total consumption of inputs and the applied rates of duty.

As education cess is being collected as duties of excise/customs, the element of education cess has been factored in the drawback rates.

The incidence of duty on HSD/Furnace Oil has also been factored in the drawback calculation.

A significant feature of the new Schedule is that the drawback rates now also take into account the incidence of service tax paid on taxable services which are used as input services in the manufacturing or processing of export goods. For this purpose, the Customs and Central Excise Duties Drawback Rules, 1995 have been suitably amended.

The drawback rates have undergone significant changes in pace with the changes in prices of inputs, duties etc. The rates have been revised upwards on most products. In the case of silk, the drawback rate for higher quality silk fabrics has been increased from 7.5% with a drawback cap of Rs 140 a kg to 8.3% with a drawback cap of Rs 250 a kg.

In the case of wool, the new drawback rate for woollen worsted yarn grey-weaving quality is 7.2% with a cap of Rs 24 a kg against the existing rate of 6.5% with a cap of Rs 22 a kg. The new drawback rate for woollen worsted yarn (dyed)-weaving quality is 8.3% with a cap of Rs 29 a kg.

The new drawback rate for grey cotton yarn of less than 60 counts is 4% with a cap of Rs 8 a kg against the existing rate of 3.5% with a cap of Rs 7 a kg. The new rate for dyed cotton yarn of less than 60 counts is 5% 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%/7.8% with a cap of Rs 20.40 per kg/ Rs 26 per kg has been provided depending upon whether the yarn is grey or dyed. As for cotton fabrics, the new rate is 4.7% (grey)/5.7% (dyed) with a drawback cap of Rs 14 per kg (grey)/Rs 20.50 per kg (dyed).

UNI