Par panel for strict monitoring to check duty drawback fraud

A Parliamentary panel today said the Finance Ministry has not made "sincere efforts" to strengthen and fix loopholes in the monitoring mechanism for preventing fraudulent claims under the duty drawback scheme.
"The committee regret to note that the Finance Ministry has not taken any concrete action in pursuance to their recommendations regarding monitoring mechanism to prevent fraudulent claims of draw back on used after import goods," Public Accounts Committee said in an action taken report tabled in Parliament today.
Further, the panel said it is not convinced by the replies submitted by the Ministry.
The committee headed by senior Congress leader K V Thomas said, "The ministry has not made sincere efforts to find out similar such cases, lying undetected, and recover the duty draw back fraudulently claimed by the exporters."

Duty drawback is a duty neutralisation scheme designed to promote exports. Its aim is to compensate all duties or taxes embedded in the manufacturing cost of export products.
The basic concept of the Duty Drawback Scheme is that export products should not carry the country's taxes so that these are revenue neutral and can compete on an equal footing in the world market.
The panel also noted that the very fact that between November 2011 and June 2013, a total of 2,442 orders were passed and in 13 cases the Commissioners were not satisfied with the loyalty and propriety of the decisions and ordered filing of appeals is a clear testimony that the existing system was inadequate to check the Duty Drawback Scheme.

Expressing hope that the Ministry will make all out efforts to fix loopholes in the existing mechanism, the report said it will help in making the scheme more effective.