SIMA hails marginal increase in duty drawback rates

Southern India Mills' Association Wednesday said the new Remission of Duties or Taxes on Export Product benefit would refund all embedded/ blocked duties and taxes and cover all textile products like fibres,yarn, fabrics and garments across the value chain to have a level playing field globally and remain competitive.

In a statement, SIMA Chairman Ashwin Chadran thanked the Duty Drawback Committee and the Government for considering the inputs given by the textiles and clothing industry and enhancing the rates marginally across the value chain.

Duty Drawback being a WTO-compatible export benefit, the scheme would help exports achieve a sustained growth rate, provided the duty drawback calculation takes care of all incidences of duties and taxes, he said.

The duty drawback rate for cotton grey yarn has been increased from 1.7 to 1.9 per cent, for fabric from 1.6 to 2, made-ups from 2.6 to 2.8 per cent, apparel from 1.9 to 2.1 per cent, thus encouraging value addition and benefit the predominantly cotton based spinning sector, he said.

This might help boost cotton yarn exports to a certain extent, he said and urged the Government to remove the value cap for spandex yarn and certain categories of woven fabrics to encourage value addition.

It was essential to refund state and Central levies that were not refunded under duty drawback calculations to make the cotton yarn and fabric exports competitive, Ashwin said, adding that the industry has been pleading the same from the inception of announcing Rebate of State Levies (RoSL) benefit for garments and made-ups.