Revised drawback rates out

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The finance ministry has brought out the revised rates of drawback that would take effect from this September onwards. Duty drawback seeks to neutralise the incidence of customs duty, central excise, and service tax borne by an exported article.

The increase in prices of inputs and the incidence of duty on HSD/furnace oil has been factored in the drawback calculation. The incidence of service tax paid on taxable services which are used as input services in the manufacturing or processing of export goods has also been factored.

There is a general reduction in the rates of drawback in most commodities. The drawback rates have undergone changes in line with the changes in the duties. The drawback rates on some of the important items are the following:

In the ready made garment sector, the new drawback rates are between 8.8% & 10.5%.

The new rate is 4% for cotton yarn (grey) and 5% for cotton yarn (dyed) irrespective of the counts of the yarn. As for cotton fabrics, the proposed rate is 4.6% (grey) / 5.5% (dyed). In the case of denim fabrics the rate proposed is 5.7% and for higher quality silk fabrics is 9.8%. The rate for fabrics of noil silk has also been revised downwards.