Shri Kamal Nath, Minister of Commerce & Industry, has announced an export package comprising of enhanced DEPB rates to help Indian exporters who had recently suffered due to a rising rupee.  Shri Kamal Nath stated that the new DEPB rates are expected to help sustain the export growth built upon the strength of a booming economy.   He expressed hope that the package would neutralize the adverse impact of rising rupee on exports which have been built upon the success of Indian economy achieved through export earnings in recent years.    

            In addition to the reduction in export realisation due to the rupee appreciation, it had been pointed out by the industry that several state taxes / levies i.e., electricity duty, sales tax on petroleum products and CST are presently not rebated.  It was also pointed out that due to the rupee appreciation, the value addition prescribed in the DEPB calculation has in fact gone down, which would necessitate upward revision in the DEPB rates.    Similarly, the value caps stipulated for various products for DEPB were stated to be unrealistic.

  The package includes the following:

®             DEPB rates have been enhanced by 3% for 9 sectors i.e., textiles (including handloom), readymade garments, leather products, handicrafts, engineering products, processed agricultural products, marine products, sports goods and toys.    

®             For the rest of the items, DEPB rates have been enhanced by 2%.    

®             ECGC premium has been reduced by 10% of the existing premium rates.

®             To clear all arrears of terminal excise duties and CST reimbursement, an amount of around Rs.600 crore has been released.  

®             The rates of duty drawback has been enhanced by around 10 to 40% of the existing rates.

®             The rate of interest on pre and post-shipment credit has been reduced by 2%.

            The matter regarding notification of exemption /refund of service tax for exports, as was announced in the Foreign Trade Policy 2007, is still under consideration.

With effect from 01.04-07 the new drawback rate for grey cotton yarn of less than 60 counts is 5.4% with a cap of Rs.11/kg as against the existing rate of 4% with a cap of Rs.8/kg. The new rate for dyed cotton yarn of less than 60 counts is 6.5% with a cap of Rs.18/kg. In respect of cotton yarn of 60 counts and more, a higher rate of 8.8% / 9.9% with a cap of Rs.26 per kg / Rs.33 per kg is being provided depending upon whether the yarn is grey or dyed. As for cotton fabrics, the new rate is 6.4% (grey) / 7.7% (dyed) with a drawback cap of Rs.19 per kg (grey) / Rs.28 per kg (dyed) as against the existing rate of 4.7% (grey) / 5.7% (dyed) with a cap of Rs.14 per kg (grey) / Rs.20.5 per kg (dyed).

The new drawback rate for hand knotted woolen carpets is 12.5% with a cap of Rs.700 per sqm. as against the existing rate of 9.4% with a cap of Rs.565 per sqm. For silk carpets, the new drawback rate is 15.5% with a cap of Rs.2750 per sqm. as against the existing rate of 11.8% with a cap of Rs.1600 per sqm. The drawback rate on cotton durries is fixed at 11.5% with a cap of Rs.26/kg as against the existing rate of 9.4% with a cap of Rs.20/kg.

In the ready made garment sector, the new drawback rate for knitted blouses/shirts/tops of cotton is 10% with a cap of Rs.48 per piece as against the existing rate of 7% with a cap of Rs.31 per piece. The new rate for knitted blouses/shirts/tops of man-made fibre is 11.5% with a cap of Rs.48 per piece as against the existing rate of 8.1% with a cap of Rs.34 per piece. For knitted blouses/shirts/tops of cotton and man made fibre blend, the new drawback rate is 10.7% with a cap of Rs.48 per piece as against the existing rate of 7.5% with a cap of Rs.32 per piece. The drawback rates on woven garments are being revised on similar lines.

In the made up category, the new drawback rate for bed linen, table linen, toilet linen, kitchen linen and curtains of cotton is 9.1% with a cap of Rs.110 per kg as against the existing rate of 6.4% with a cap of Rs.64 per kg. The new drawback rates on made-ups of manmade fibres and made-ups of silk/wool are also being revised upwards. The new rates are 10.4% and 9.8% respectively as against the existing rates of 7.5% and 6.9%.

The new drawback rate for finished leather is 7.5% with a cap of Rs.8 per sq.ft. as against the existing rate of 6.6% with a cap of Rs.7 per sq.ft. Likewise, the new drawback rate for leather footwear for adults is 11.5% with a cap of Rs.105 per pair as against the existing rate of 9.5% with a cap of Rs.85 per pair. In the case of leather apparels the rate provided is 11.4% with a cap of Rs.650 per piece as against the existing rate of 9.5% with a cap of Rs.533 per piece. The drawback rates on other leather items viz. suit cases, handbags and gloves are also being revised upwards.

 

The drawback rates on other items are also being revised upwards. Responding to requests from exporters some additional lines have been introduced in the Drawback Schedule. These include leather-cum-synthetic / textile footwear upper, coir mats.