Centre extends duty drawback facility for textiles

03 Nov '16

3 min read

With an aim to help increase textile exports, the Central government has extended duty drawback facility on all textile items for one year. It has also increased duty drawback rate on home textiles from 7.3 per cent to 7.5 per cent. Likewise, blankets and other cotton products will enjoy duty drawback of 8 per cent now compared to 7.2 per cent earlier.

The duty drawback rates for cotton yarn during 2015-16 were 3 per cent for counts less than 50s, 2.7 per cent for counts 50s to 100s and 2.5 per cent for counts 100s. For counts 50s to 100s, the rate has now been increased to 2.8 per cent while there is a marginal reduction in the value cap.

The duty drawback rate for grey fabric has been retained with a marginal increase in value cap and for dyed fabric there is a marginal increase in duty drawback rate up to Rs 7.00 per kg in the value cap.

In the case of apparel, though the rates have been retained at the same level (cotton garments 7.7 per cent, blended 9.5 per cent, man-made fibre 9.8 per cent), the value cap for cotton garments has been increased from Rs 103 per kg to Rs.146 per kg while the same value caps of Rs 110 per kg and Rs 150 per kg have been retained for blended and man-made fibre garments.

For made-up textiles, the drawback rate has been increased from 7.3 per cent to 7.5 per cent and the value cap per kilogram has been increased from Rs 70 to Rs 75.

“The revised duty drawback rates encourage value addition,” M Senthilkumar, chairman, The Southern India Mills Association (SIMA), said in a press release.

Welcoming the announcement, The Cotton Textiles Export Promotion Council (TEXPROCIL) chairman RK Dalmia said, “The revised drawback rates will certainly give a boost to exports of cotton textiles as they will provide adequate neutralisation of the incidence of duties and taxes on the export goods and make them more competitive in the international markets.”

The drawback rates and caps have been increased for made-ups both made of cotton, as well as cotton blended with man-made fibre. This is a step in the right direction as it will promote exports of value-added products in line with the stated policy of the government, Dalmia said.

He urged the government to also refund un-rebated state levies through the drawback route for yarns, fabrics and made-ups as in the case of apparel. (RKS)

Fibre2Fashion News Desk – India

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