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Request for views/Suggestions and data for review of All Industry Rates (AIRs) of Duty Drawback for the year 2018

Circular No.ES/20/2018-19                                                                                                 April 16, 2018

To: Members of the Council

Sub: Request for views/Suggestions and data for review of All Industry Rates (AIRs) of Duty Drawback for the year 2018

Dear Member,

As you are aware, Post GST Regime, the revised drawback rates are unable to impact much on MMF Textile exports, thereby making the products globally uncompetitive. Also, the new drawback rates and value caps are unable to promote value addition and export of value-added products. The effort of the Ministry of Finance to fix the Drawback rates comes at a time when the Government is in the process of implementing the new tax regime in the country. The Council has been urging the Government to reconsider the decision of fixing low rates of the duty drawback since it has adversely affected the MMF Textile sector.

Now, the Council has received a communication from the Drawback Department vide Letter No. 609/27/2018- DBK dated 12th April, 2018 inviting views/suggestions and data for review of All Industry Rates (AIRs) of duty drawback for the year 2018.

It may be informed that the Government is proposing to review the All Industry Rates (AIRs) of Duty Drawback for the year 2018 with reference to the incidence of Customs and Central Excise duties on goods manufactured for export.

In this regard, members are requested to provide data w.r.t. inputs used in the manufacture and the respective export products in the specified enclosed Proforma- I (A), II, and III.

  • The consumption of input materials and incidence of duties against the export of a particular product is to be filled in Proforma I.
  • Proforma II requires information on the actual cost, including the break-up, incurred for making the export product and the sales realization on such export product.
  • Proforma III requires details of captive power used for manufacturing the export product.

 While providing the above data, the following aspects should be taken care of:-

  1. Data provided should be for the exports made during the period October 2017 to March 2018.
  1. For a particular manufactured export item, the details of all input(s) that are used in the manufacture of all types/styles of that particular export item should be indicated.
  1. The incidence of duty should be restricted to Customs duty on the inputs and Central Excise duty on petroleum products as specified in Schedule- IV of the Central Excise Act, 1944.
  1. The incidence of other taxes/duties such as GST, States/UT taxes, etc. should not be included for calculation of total incidence of duties for the purpose of duty drawback scheme.
  1. Data submitted should pertain to at least five units for each export product so as to be representative of the industry. The units should be selected from amongst the small, medium as well as large manufacturer exporters.
  1. Data provided should be of manufacturers/ manufacturer exporters and it should be certified by the manufacturer and its Chartered Accountant/ Cost Accountant.
  1. The data should be supported by relevant documents such as –
  1. Bills of Entry of imported inputs
  2. Shipping Bills of export product,
  3. Relevant Central Excise invoices, etc.
  1. The data provided should pertain to only those manufacturers/units that are ready to have their records and production processes subjected to inspection by Customs/ Central Excise Department if required for the purpose of verifying the correctness of information.

The above requested information sent by you will help the Council in pursuing the matter for revising the rates of MMF Textiles in the AIR Drawback Schedule, suitably.

I therefore urge all my fellow members to send us the above documents to the Council at the following email ids (ed@srtepc.in, baruah@srtepc.in and es@srtepc.in) latest by 23rd April, 2018 for enabling us to prepare Calculations based on your data for a suitable Drawback Rate to the Drawback Division for consideration.

We solicit your valuable views/suggestion and receipt of documents in this matter.

Members are requested to fill in the Proformas and send the same along with the desired documents by the due date as suggested above.

Thanking you,

Yours faithfully,

S. BALARAJU
EXECUTIVE DIRECTOR

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