Indian government announces revised duty drawback rates
A significant feature of the new Drawback Schedule is that barring a few exceptions the rates on all export products have been expressed in ad valorem terms in lieu of earlier specific rates, i.e. Metric Tonne /kg etc. Though the weight based drawback is reported to be less vulnerable to abuse, the ad valorem rates are said to have the dual virtue of first being fair to the exporters and secondly, to serve the policy objective of encouraging the export of value added items. Therefore, as a conscious policy decision, it has been decided to express drawback rates in ad valorem terms. The new Drawback Schedule now covers about 2620 entries.
The drawback rates on leather and leather products have generally been revised upwards. The new drawback rate for finished leather is 6.3% with a cap of Rs. 5 ($0.115) per square foot as against the existing rate of 5.1% with a cap of Rs. 3.40 per square foot. Likewise, the new drawback rate for leather footwear for adults is 8.3% with a cap of Rs. 70 per pair and the rate for leather footwear for children is 9% with a cap of Rs. 40 per pair. Under the existing Schedule, no distinction exists between adult footwear and children’s footwear and all leather footwear carries a drawback rate of 7.9% subject to a maximum of Rs. 61/pair. In the case of leather apparel the rate provided is 7.5% with a cap of Rs. 400 per piece as against the existing rate of 7.2% with a cap of Rs. 360 per piece.
