labels: industry - general, economy - general, governance
All-industry duty drawback rates revisednews
Our Economy Bureau
20 January 2005

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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All-industry duty drawback rates revised