The government has announced new rates for duty drawback or tax refunds on 4,000 export items for the current fiscal, which is slightly lower than what was provided in 2010-11.
The new rates will come into effect from October 1.
While notifying the All Industry Rates of Duty Drawback for 2011-12, the Revenue Department said: "Most of the items which are already covered under the duty drawback schedule will suffer a minor reduction in the existing drawback rates".
The reduction is mainly on account of the reduction in basic Customs duty on crude petroleum as well as a reduction in Central excise duty on diesel, it added.
Exporters will now get drawback on 4,000 items, including those which are presently covered under the Duty Entitlement Pass Book (DEPB) scheme.
The DEPB scheme, which is popular among exporters and covers about 1,100 items, will expire on September 30.
The Department further said that while incorporating these DEPB items in the drawback schedule, care was taken to classify them appropriately.
According to industry sources, the reduction in refund rates amounts to withdrawal of the stimulus package given in 2008-09 after the global financial crisis.
The government spent Rs 8,700 crore last year on DEPB refunds on various items in sectors like engineering, chemicals, pharmaceuticals, textiles and marine products.
Source : Exim News Service - NEW DELHI, Sept. 25