According to GK Gupta, chairman of Synthetic & Rayon Textiles Export Promotion Council (SRTEPC), a delegation of exporters which met the minister recently had apprised him of the havoc caused in the wake of the changes in the excise duty structure on processed fabrics from ad valorem to compounded levy on chamber basis from December 16, 1998.

Gupta further added that the minister gave a sympathetic hearing to the concerns of the exporters and promised to take up the matter with the finance minister to find an early solution.

The SRTEPC chairman also said that the Union textile secretary and textile commissioner were aware of the situation and fully appreciated the views expressed by the delegation. The delegation brought to the notice of the minister the issue of refund of excise duty for exports made during the interveningperiod between December 16, 1998, and February 16, 1999, with retrospective effect for rebate from February 16 and refund of yarn stage duty of 7.2 per cent. They have also asked for refund of both yarn duty and process duty to the processed fabrics falling under chapter 58 and 60.

He said that the haste with which government affected changed duty structure on processed fabrics from ad valorem to compounded levy on chamber basis vide the above notification had created havoc with the export activities of processed fabrics. As a result, processed fabrics exports which accounted for nearly 87 per cent (Rs 1,650 crores) of the total synthetics export has come to a near standstill. He stated that prior to change in excise duty structure, the exporters were getting refund of full 20 per cent of paid excise duty. The latest notification has provided for refund of the duty from February 16, 1999, but the department has yet not clarified about the duty paid between December 16, 1998, (when the duty was changed)until February 16, 1999.

The exporters demanded a retrospective effect to the notification and also asked for a clear-cut rebate procedure. They have also asked the authorities to allow rebate of 7.2 per cent of input duty which has no mention in the latest notification, alongwith the rebate of 12.8 per cent of process duty, as was done in the earlier duty structure.

According to Gupta, the exports have been affected by south Asian contagion and the global recession has already put heavy financial burden on exporters. The indecisive conditions laid down in the above mentioned notification has made exporters hold on to their precious export orders stretching their financial abilities to the extreme.

As a result several LCs are being cancelled each day and the country is losing its prestige in the international market.