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Surat textile exporters unhappy with minimal hike in duty drawback rates

A move by the Central government to retain the duty drawback rate for grey and dyed fabrics with a little increase has made exporters of man-made fabrics (MMF) in Surat unhappy. In a notification dated November 1, the Central Board of Excise and Customs (CBEC) has extended the duty drawback benefits for textile exporters to overcome the barriers they face in exports.

The duty drawback rate for grey fabric has been retained with a marginal increase in value cap and in the case of dyed fabric, a marginal increase in duty drawback rate up to Rs 7 per kg in the value cap has been done. In case of apparel, though the rates have been retained at the same level (cotton garments 7.7 per cent, blended 9.5 per cent, man-made fibre 9.8 per cent), the value cap for cotton garments has been jacked from Rs 103 per kg to Rs 146 per kg while the same value caps of Rs 110 per kg and Rs 150 per kg have been retained for blended and man-made fibre garments respectively.

However, textile MMF exporters in Surat believe that the government should allow some increase in duty drawback to boost export of polyester fabrics. As per the Synthetic Rayon Textile Export Promotion Council (SRTEPC), the annual export of fabrics from Surat is pegged at over Rs 1,300 crore. However, the marginal increase in duty drawback rates is not going to give a level playing-field to the exporters of MMF fabrics in comparison to those exporting cotton fabrics.

Duty drawback is the rebate of duty chargeable on imported material or excisable material used in the manufacturing of goods. The exporter may claim drawback or refund of excise and customs duties being paid by his suppliers. The final exporter can claim the drawback on material used for the manufacture of export products. In case of re-import of goods the drawback can be claimed.

 
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