Restore duty drawback, textile exporters tell government.

New Delhi: Textile exporters have urged the government to restore the duty drawback scheme for cotton yarn exports. The government withdrew the duty drawback on exports of cotton yarn last Thursday.

VS Velayutham, chairman of Texprocil, a non-profit international marketing organisation for local cotton yarn, fabrics and garments, said. “Withdrawal of the scheme was unfortunate with long term implications for the healthy development of the Indian textile industry.”

Duty draw back aims at reimbursing the customs and excise duties on the inputs that go into export production. “By withdrawing the duty drawback on cotton yarn arbitrarily, the government has dealt a severe blow to export trade and gone against its own principle of exporting goods and not taxes,” Velayutham stated. He appealed to the government to reconsider its decision.

He also said the scheme was not an export subsidy and does not violate India’s obligations at the multilateral trade forum, the WTO. The WTO Agreement on Subsidies and Countervailing Measures clearly permits exemption or remission of prior stage cumulative indirect taxes or import charges levied on inputs that are consumed in the production of the export product, Velayutham added.

Source : Financial Express