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SIMA hails govt decision on Duty Drawback
18 Nov '15
3 min read
The Southern India Mills' Association (SIMA) has hailed the Central Government's decision for considering its pleas and enhancing the drawback rates and value caps for various value added products such as yarns counts in 100s and above, fabrics with less than 200 grams per sq.mtr, knitted and woven garments.
On November 16, the Central Government notified the Schedule of revised All Industry Rates of Duty Drawback effective from 23rd November, 2015
In a press release, SIMA Deputy Chairman, P Nataraj said the attractive rates given for certain value added products would encourage the textile industry to focus more on value addition which would generate more foreign exchange. He said that there is a marginal reduction in the normal products, both in the drawback rates and value caps, which could have been avoided considering the crisis being faced by the industry.
Nataraj pointed out that the revised rate also encourages the industry to follow the Cenvat route to prepare the industry for the GST when it comes into force. He said that when the exports opt for cenvat facility, they would get enhanced rate and value.
The SIMA Deputy Chairman said has that for the first time three count groups have been given for yarn based on the request made by the Association so that the value added yarn producers would get better compensation under duty drawback system.
For example, spinning mills in South India account more than 90 per cent of superfine count yarn exports (100s and above) and such yarn is eligible to get Rs 25.60 per kg as drawback value as against the previous value of Rs.18.00 per kg. Similarly, the woven grey fabric with less than 200 grams per sq metre were earlier given Rs 37 per kg and now the revise rate is Rs.40 per kg.
However, for the fabric above 200 grams per sq metre, the value cap has been steeply decreased from Rs.37 to Rs.19 per kg. The drawback rate for cotton garments have been increased from 7.5 per cent to 7.7 per cent and value cap has been increased from Rs.75 per kg to Rs.103 per kg. In the case of cotton made ups, the value cap has been reduced from Rs.71 to Rs 70 per kg while the rate has been increased from 7.1 per cent to 7.3 per cent. (SH)
On November 16, the Central Government notified the Schedule of revised All Industry Rates of Duty Drawback effective from 23rd November, 2015
In a press release, SIMA Deputy Chairman, P Nataraj said the attractive rates given for certain value added products would encourage the textile industry to focus more on value addition which would generate more foreign exchange. He said that there is a marginal reduction in the normal products, both in the drawback rates and value caps, which could have been avoided considering the crisis being faced by the industry.
Nataraj pointed out that the revised rate also encourages the industry to follow the Cenvat route to prepare the industry for the GST when it comes into force. He said that when the exports opt for cenvat facility, they would get enhanced rate and value.
The SIMA Deputy Chairman said has that for the first time three count groups have been given for yarn based on the request made by the Association so that the value added yarn producers would get better compensation under duty drawback system.
For example, spinning mills in South India account more than 90 per cent of superfine count yarn exports (100s and above) and such yarn is eligible to get Rs 25.60 per kg as drawback value as against the previous value of Rs.18.00 per kg. Similarly, the woven grey fabric with less than 200 grams per sq metre were earlier given Rs 37 per kg and now the revise rate is Rs.40 per kg.
However, for the fabric above 200 grams per sq metre, the value cap has been steeply decreased from Rs.37 to Rs.19 per kg. The drawback rate for cotton garments have been increased from 7.5 per cent to 7.7 per cent and value cap has been increased from Rs.75 per kg to Rs.103 per kg. In the case of cotton made ups, the value cap has been reduced from Rs.71 to Rs 70 per kg while the rate has been increased from 7.1 per cent to 7.3 per cent. (SH)
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