Drawback rates increased for apparel export

The Union Ministry of Finance has notified a rise in the duty drawback rates for the apparel sector, to take effect from Tuesday.

aims The drawback to provide scheme refund/recouping of customs and excise duties paid on import of inputs or raw materials and service tax paid on input services used in the manufacture of export goods.

For cotton-based products, there would be a 0.2 percentage point increase. For man-made fibre and blended garments, of 0.4-0.6 percentage points.

While welcoming the announcement, exporters say the rise is not enough. They ’d also like free trade agreements (F TAS) with countries they export to and des patch in the Centre’s clearance of payments under the Scheme for Rebate of State Levies on Export of Garments (ROSTL), delays in which affect their working capital.

After the revision, the drawback rate for cotton t-shirts would be 2.1 per cent, as against the earlier 1.9 per cent.

In blended garments, 3.5 per cent versus 2.9 per cent earlier; for man-made fibre, 3 per cent as against the earlier 2.5 per cent.

In the first nine months of 2018-19 (April-december), export of readymade garments was $11.36 billion which rose to $11.46 billion in 2019-2020.

Association The Tirupur in this Exporters state, whose shipment abroad last year was ~24,000 crore, says it would like F TAS with

Britain, the European Union, Australia and Canada. As for claims under ROSTL, their units say around ~1,400 crore is pending.