Policy

Handicraft exporters seek hike in input duty refund rates

Amiti Sen New Delhi | Updated on September 21, 2021

A delegation of handicraft exporters met FM on Monday   -  The Hindu

Expect rates in the 3-5% range; also want resumption of duty-free import of embellishments

Handicraft exporters have sought higher rates under the new input duty refund scheme for exporters announced by the government recently and have submitted the relevant documents in a meeting with Finance Minister Nirmala Sitharaman.

“Handicraft items have been allocated very low rates of refund ranging between 0.01 per cent to 2.4 per cent while exporters calculations show that the rates should be between 3 per cent and 5 per cent. We met the FM and submitted all documents to prove our point,” Rajesh Rawat from Export Promotion Council for Handicrafts told BusinessLine.

The Commerce & Industry Ministry had announced rates under the new Remission of Duties and Taxes on Exported Products (RoDTEP) scheme last month. Although the scheme aims to remit all input taxes and levies that are not refunded to exporters through other schemes, many sectors have been complaining that the rates announced are much lower than the taxes they pay on inputs.

Restoration of DFIC

A delegation of handicraft exporters led by Rajya Sabha MP Syed Zafar Islam met Sitharaman on Monday and also discussed other issues of concern such as restoration of Duty Free Import of Embellishment/Consummables (DFIC).

Provision of duty free import has helped handicraft exporters to import items for embellishing their products like lighting and lamps, fashion jewellery, wooden handicraft and others to enhance the quality and look as per the tastes and preferences in vogue in the international market, pointed out Rakesh Kumar, an exporter of handicraft and Director General of EPCH.

New and novelty items have been produced by the handicraft exporters of Moradabad, Jaipur, Jodhpur, Saharanpur and other craft clusters on a regular basis and exported to various countries all across the globe and is of the utmost importance for the exporters of handicraft, stated Kumar in the meeting with FM, while also pointing out that the sector will be badly hit by the withdrawal of DFIC.

“The government’s argument is that exporters can use the advance licence scheme for duty free imports but it doesn’t work out for small exporters as it has various other requirements such as meeting export obligation,” explained Rawat.

In 2020-21, exports of handicraft posted a small decline of 2.93 per cent to $3.6 billion, per industry figures. In the April-August 2021 period, exports have posted a 75.57 per cent growth to $1.66 billion.

Published on September 20, 2021

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