Government may review duty drawback rates

In wake global economic meltdown and increasing difficulties of exporters as a result, the government may review duty drawback rates to provide some relief to export industries. Individual exporters as well as industry bodies of exporters have approached government in this regard and government may take their requests favorably due the difficult economic conditions, especially in developed world.

Under the duty drawback scheme excise duty paid on the domestic raw material used in manufacturing export items is paid back to exporters. The move is aimed at preventing double taxation and cascading of taxes and helps increasing cost effectiveness of Indian exports.

Government feels that due to changed economic scenario, exports may come down which will result in further widening of mercantile trade balance. Export growth during September has already hit a low of 10% compare to around 30% growth in previous months. In this wake, the move to review drawback rates may help Indian exporters gain greater market share and hence put exports back on fast track growth.