New Delhi, Jan 20: The finance ministry has rationalised the duty drawback structure of several products, by imposing caps on the value of drawback which can be availed by exporters.The products on which caps have been imposed for the first time or reduced include floor coverings, including carpets, readymade garments, cotton terry towels, sports goods, cotton durries, certain leather items, and brassware products. The move has evoked criticism from exporters. The Associated Chambers of Commerce and Industry and some export-promotion bodies have taken up the matter with the finance and commerce ministries.
The ministry has reduced the cap on readymade garments from Rs 75 per piece to Rs 63 per piece and brass artwares from Rs 50 per kg to Rs 34.60 per kg. For the first time, it has imposed a cap of Rs 18 per kg on cotton durries, Rs 8 per kg on cotton terry towels, and Rs 8.80 per unit on electric motors, which are not specified elsewhere in the drawback table.
The sports goods on which the drawback cap has been imposed for the first time include cork balls, cricket bats, and all kinds of inflatable sport balls which are made of polyurethane leather. Other products on which the drawback rates have been rationalised are bicycle chains, agarbatties, rubber cycle tubes, gaskets, and hot water bottles. The exporters claim export of these products would be badly hit.However, finance ministry officials argued that the drawback rates have been rationalised on the basis of the data provided by the respective export-promotion bodies.
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