Finally one good news for Indian textile industry has come as Central Board of Excise & Customs (CBEC) has issued a Notification revising the drawback rates and value caps based on the data furnished by the respective manufacturing sectors. Knitted garment (cotton blended, synthetic, cotton) and knitted garment (cotton blended, synthetic) is benefitted from the new rates.
Yarns counts in 100s and above, fabrics with less than 200 grams per sq. m., knitted and woven garments have also been benefitted.
Indian textile industry feels that attractive rates given for certain value-added products would encourage the textile industry to give more focus for value addition which would generate more foreign exchange. Whereas there is a marginal reduction in the normal products, both in the drawback rates and value caps, which could have been avoided considering the crisis being faced by the industry. The revised rate also encourages the industry to follow the Cenvat route to prepare the industry for the new levy ‘GST’. When the exporters opt for Cenvat facility, they would get enhanced rate and value. New rates will be effective from 23rd November, this year.
Also Read – New rate of duty drawback: Blended garments in gain
Apart from the rate change, many new items have also been included to better differentiate export products with higher duty incidence and also to address classification issues. A provision has been made to pay provisional drawback to exporters soon after export in case of certain exports made under claim for brand rate of duty drawback. P Nataraj, Deputy Chairman, The Southern India Mills’ Association (SIMA) has thanked the Central Government, Minister of State for Commerce & Industry (I/C), Nirmala Sitharaman, and Chairman of Duty Drawback Committee, Dr. Saumitra Chaudhri for favourably considering the pleas made by the association. Nataraj said that for the first time three count groups have been given for yarn based on the request made by the association so that the value-added yarn producers would get better compensation under duty drawback system. For example, spinning mills in South India account more than 90% of superfine count yarn exports (100s and above) and such yarn is eligible to get Rs. 25.60 per kg as drawback value as against the previous value of Rs. 18 per kg. Similarly, the woven grey fabric with less than 200 grams per sq. metre were earlier given Rs. 37/kg and now the revise rate is Rs. 40/kg. However, for the fabric above 200 grams per sq. m., the value cap has been steeply decreased from Rs. 37/kg to Rs. 19/kg. The drawback rate for cotton garments have been increased from 7.5% to 7.7% and value cap has been increased from Rs. 75/ kg to Rs. 103/kg. In the case of cotton made ups, the value cap has been reduced from Rs. 71/kg to Rs. 70/kg while the rate has been increased from 7.1% to 7.3%.
The Government of India has recently extended 2% MEIS export incentives to fabrics and other products and also included a large number of countries under the eligible list.
