MoF panel to review cut in duty drawback .

 NEW DELHI: Duty drawback rates for some sectors are up for review. The finance ministry has reconstituted the drawback committee to examine the  rates that were announced in August this year. The move is aimed at addressing the concerns of the export community which has been critical of drawback cuts during the current fiscal.

The committee is headed by the prime minister’s economic advisory council member Saumitra Chaudhuri. The other members in the panel are former textile secretary SB Mohapatra and former chief commissioner of Customs and central excise TR Rustagi. Drawback is the Customs duty paid on the inputs used for producing an item that is exported. If domestic raw materials are used, excise duty paid on the inputs is returned as drawback. Duty drawback seeks to neutralise the incidence of Customs duty, central excise duty and service tax borne by an exported product.

Sources in the finance ministry said the committee had been reconstituted to look into the grievances of exporters. Various export organisations like Federation of Indian Export Organisation and individual exporters had represented to the finance and commerce ministries after the reduction in rates.

The commerce department and the textiles ministry had asked the finance ministry to continue with the rates announced last fiscal to give relief to exporters who are under pressure in the wake of slowdown in the US economy. Drawback rates were slashed for sectors including textiles and textile articles, leather and leather articles, metals and articles of metals and bicycle and bicycle parts.

Finance ministry sources said the rates were reduced in keeping with the duty changes effected this year in budget and later. The excise duty has been reduced across the board from 16% to 14% in the budget, while Customs duty on various items, including crude oil, had been done away with during the financial year. They said a marginal correction in the rates in some items could be expected, but ruled out an overall increase. However, caps imposed in certain cases could be removed, they said.

Source : The Economic Times