New Delhi: The finance ministry has revised the all-industry
duty drawback rates to give effect to the customs and
excise duty changes announced on July 8 last year in the
union budget for 2004-05.
Duty
drawback payments are made to exporters to neutralise
the customs and excise duties paid on inputs used in the
manufacture of exportable products.
The
latest drawback rates have been determined on the basis
of certain broad parameters including the prevailing prices
of inputs, standard input / output norms published by
the Directorate-General of Foreign Trade (DGFT), share
of imports in the total consumption of inputs and the
applied rates of duty.
For
arriving at the revised duty drawback rates (effective
January 19), the finance ministry has also factored in
the 2 per cent education cess that is now being collected
as duties of excise and customs.
A
circular issued by the revenue department on Tuesday highlighted
that a significant feature of the new drawback schedule
is that the rates for most products have been expressed
in terms of metric tonnes / kg instead of the earlier
ad-valorem rates.
Further,
the input-output rates, previously expressed in terms
of numbers, pieces and gross have now been changed to
metric tonne / kg.
The
adoption of specific rates as against ad-valorem rates
would help prevent disputes and litigation arising from
alleged over-invoicing of exports. "Ad-valorem rates
generally encourage over-invoicing. Under specific rates,
we are insulated from over-invoicing," sources said.
To
make the drawback schedule attractive and useful for exporters,
the
ministry has provided drawback of excise duty for several
entries in respect of which no drawback of excise duty
was hitherto provided.
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