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Many global buyers have filed for bankruptcy, leading to order cancellations that have shaken exporters. The rules say that if a buyer does not pay for shipped goods, exporters would have to return with interest the government benefits they availed of.
Finance Ministry is pushing the tax department to cut duty drawback rates as receipts continue to rise following depreciation in rupee.
Expressing concern over recent reduction in duty drawback rates for sectors like engineering, CII today said the move would erode the competitiveness of the segment in the global market.
The government‘s move to cut duty drawback has not been received well by the industry. M&M has expressed its displeasure. The company said that they expected the government‘s support to continue. With the cut in duty, a price rise is on the cards.
The 14-year-old Duty Entitlement Pass Book (DEPB), the popular tax refund scheme for exporters, came to an end today.
The government on Thursday announced new rates for duty drawback or tax refunds on 4,000 export items for the current fiscal, which is slightly lower than what was provided in 2010-11.
The commerce secretary today reiterated fears of a slowing export situation in the nation. Given the crisis that the US and European economy riddle in, this comes as no surprise.
Pitching for a longer extension of the DEPB for exporters beyond September 30, Commerce Ministry officials contend that bringing the curtains down on the scheme will involve gigantic paper work, which requires more time.
