The Hindu Business Line : Drawback scheme to cover 4,000 items

THE expert committee set up to review the duty drawback rates for exporters has recommended that the January 2005 shift to specific rates of drawback be reversed and the rates be announced on an ad valorem basis.

The committee, which submitted its report on Wednesday to the Union Finance Minister, Mr P. Chidambaram, has adopted the harmonised system of nomenclature and practically the entire gamut of manufacturing has been covered.

The Chairman of the committee and a member of the Prime Minister's Economic Advisory Council, Mr Saumitra Chaudhuri, told Business Line that more than 4,000 entries are now covered under the drawback scheme against the earlier list of around 1,100.

"Even entries not specifically listed have been covered," he said.

According to Mr Chaudhuri, the rates recommended would be much superior to the earlier rates, particularly in the case of textiles and manufacturing.

"We have consciously erred on the side of generosity," he added.

Sources in the committee said that the recommendations are such that exporters currently availing themselves of the duty entitlement pass book (DEPB) scheme would find a transition to the drawback regime a "painless one" since the gap between the DEPB rates and the drawback rates have been considerably narrowed.

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