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New duty drawback scheme to boost exports of expensive garments

Under a special advance authorisation scheme, the government has introduced duty drawback of 3.2 per cent to 4.7 per cent (depending on the category) for exports of non-fabric inputs made from imported fabrics. This will boost export of expensive apparels made from imported fabrics, it is hoped. Welcoming the decision, the garment sector has said that the move would encourage exporting units to enhance production.

Chandrima Chatterjee, advisor, Apparel Export Promotion Council (AEPC), said that the AEPC had requested the government to consider expansion of duty drawback because apparels made from imported fabrics under advance authorisation attract various other taxes on inputs. Duty free import of fabrics under special advance authorisation will be allowed for export of apparels covered under Chapter 61 and 62, subject to terms and conditions.

The authorization, that will be issued based on standard input output norms (SION) or prior fixation of norms committee, shall be issued for the import of relevant fabrics including inter lining only as input. No other input, packaging material, fuel, oil and catalyst will be allowed for import under the authorisation. As determined by the government, exporters will be eligible for duty drawback on non-fabric inputs. Authorisation and the fabric imported shall be subject to actual user condition. The same shall be non-transferable even after completion of export obligation. The fabric imported shall be subject to pre-import condition and it shall be physically incorporated in the export product (making normal allowance for wastage). Only physical exports shall fulfil export obligation.

 
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