The finance ministry on Friday increased the duty drawback benefit for gold jewellery exporters, for whom raw material costs have gone up due to the recent increase in the import duty on gold to 8% from 6%. The move is aimed at reducing the duty burden on raw material of exporters and is a step in the direction of encouraging value-added jewellery exports.
As per a notification issued by the Revenue Department, duty drawback — a scheme to refund the taxes that go into export products — has been raised from R100.7 per gm of net gold content in jewellery or parts to R173.7.
The decision to help exporters follows the recent policy measures taken to check the gold imports, which have been aggravating the country's current account deficit.
“The increase in the rate of duty drawback only factors in the recent hike in the import duty on gold. International trading norms do not allow domestic taxes to be part of export products' price. This measure in isolation may not boost jewellery exports,” said M Rafeeque Ahmed, president, FIEO.