Gold and silver jewellery exporters have cause to cheer as the Government has, for the first time, specified drawback rates for such exports. Through drawback payments, exporters can avail themselves of refund of duty suffered on the inputs used in the manufacture of export products.
The Finance Ministry has specified an all-industry drawback rate of Rs 22.60 per gram of net gold in case of gold jewellery exports. In the case of silver jewellery, the drawback rate has been pegged at Rs 1,030 per kg of net silver content. However, no drawback will be available for goods manufactured or exported in discharge of export obligation under schemes that provide duty-free import /replenishment /procurement from local sources of gold/silver.
New inclusions
Gold and silver jewellery form part of the list of six entries that have been included in the existing drawback schedule. The other items are wooden bat (sports good); bells, gongs, statuettes, ornaments, picture frames of aluminium and iron and steel; leather safety footwear with protective metal toe; jars and perfume bottles and lanterns/lamps made of glass.
Meanwhile, the Government has dashed the hopes of the exporting community by retaining drawback rates as the existing level for the current fiscal in respect of all items in the drawback schedule.
“The Government has introduced six new entries in the drawback schedule. The rates and caps on other items remain unchanged. The drawback schedule that was announced in August 2008 will continue to be in operation” , official sources said.
Exporters disappointed
The Government's decision not to tinker with drawback rates has disappointed many exporters, who were expecting an increase in drawback rates.
The thinking in official circles is that the fiscal stimulus measures are likely to be withdrawn early next year and with just three months to go before the Union Budget, it may not be prudent to announce new drawback rates for 2009-10 now.
Source : Business Line