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Our Bureau

New Delhi, Dec 15 The Finance Ministry increased drawback rates in the for certain items in the textiles sector. The exporting community has, however, expressed disappointment over the move, stating that the duty drawback increase was “too little too late”.

Under duty drawback scheme, customs duty, excise duty and service tax paid on inputs are refunded to the exporter of finished products .

Official sources said that the latest increase has come about only after analysing the cost data submitted by various textile export promotion councils.

While releasing the third package of rupee appreciation relief measures , the Finance Minister, Mr P Chidambaram had told Parliament on November 29 that he had asked councils to provide inputs to the drawback committee. He had said that a decision would be taken on the basis of the recommendation of the committee.

Reacting to the latest changes in the drawback rates on textile items, Mr Ganesh Kumar Gupta, President of Federation of Indian Export Organisations (FIEO), an export promotion body, said in a statement that the enhancement does not offset the lossesfrom appreciation of rupeeand would “hardly increase the competitiveness of the textiles sector”.

FIEO said that most of the increase for the garment sector was in the range of 0.25 per cent to 1 per cent and 0.8 per cent to 2 per cent for carpets.

Mr Gupta said the industry had demanded an increase of 4-5 per cent in the drawback rates .

FIEO has urged the Finance Ministry to further enhance drawback rates by 3 per cent for textiles sector and between 4 to 5 per cent for other sectors using indigenous inputs.

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