The notification clarified that the duty on exported fabrics will be reimbursed on the basis of average of duty paid, but not exceeding Rs 3.80 per square metre, where the processed textile fabrics are manufactured in a factory which has duty paid duty at the rate of Rs 1.5 lakh per chamber per month and Rs 5.10 per square metre where the processed textile fabrics are manufactured in a factory which has paid duty at the rate of Rs 2.00 lakh per chamber per month.

This clarification was awaited since December 16, 1998, when the excise duty structure for the processed fabrics was changed from ad valorem to the compounded levy on the basis of chamber.

Exporters of synthetic and rayon fabrics heaved a sigh of relief, according to chairman of Synthetic and Rayon Textiles Export Promotion Council (SRTEPC), GK Gupta. He pointed out that the presentnotification was an insertion in the existing notification and hence refund of duty should be available with retrospective effect from December 16, 1998. However, he has asked the authorities to issue a clarification in this regard, so as to avoid any uncertainty among exporters. He criticised the authorities for being silent in the notification about the refund of yarn duty which was earlier available at the rate of 7.2 per cent to the exporters.

He added that since the process-stage duty is being refunded on the basis of actual amount so collected, the rate of refund of yarn duty too should similarly be based on the actual incidence of the duty.

In this connection, he stated that the present industry rate of drawback reflects the actual incidence of yarn duty, which in respect of exports should be made available at that rate under DEPB scheme as well.

It is likely that the authorities may want the exporters following the DEPB route to go in for Brand Rate in order to claim refund of yarn duty.

Heemphasised that the Brand Rate route will not be feasible for a large number of merchant-exporters who hold a sizeable share in the export trade of synthetic and rayon textiles as they will not be able to produce document regarding payment of yarn duty.

Besides, the fixation of Brand Rate involved a cumbersome and time--consuming procedure and also has its own uncertainties, he added. He has called upon the authorities to clarify that the announcement of refund of process stage duty applied in respect of exports made from February 16, 1998, onwards and to announce the rate of refund of yarn stage duty on the basis of what is granted under the All Industry Rate of Drawback.

He said that many exporters had been hesitant to take up export activity during the last two months in view of the non-announcement of procedure for claiming refund of yarn and process stage duty. Some of those who undertook exports have suffered during this period due to blockade of large amount of funds.

He added that this has givena setback to the efforts of the council to expand trade to achieve the export target set for synthetic and rayon textiles by the government. In this connection, Gupta recalled that exports of processed synthetic fabrics in fabric trade were to the tune of Rs 1,650 crores in the previous year, holding a dominant share at 87 per cent.