Textile industry wants government to review last month's revision of duty drawback value caps and to raise the caps on a general basis.
The latest notification effective November 21, 2005 raised value caps for products such as overcoats, windcheaters, suits, ensembles, jackets and trousers in knitted and woven segments.
While most of the industry players welcomed the latest notification that raised duty drawback value caps in some particular sectors, they say it still fails to satisfy demands to bring back the rates existing in January 2005 and to replace it with a more open and transparent policy.
Apparel Export Promotion Council appealed to the Finance Ministry to review upward revision in the drawback rates on general basis.
Council further urged to increase the value caps in all those apparel products, which have been excluded in the latest revision, informed Chairman A Sakthivel.
It was very important that the rates existing before January 18, 2005 are brought back, therefore industry could double its exports, recommended the council.
Government has changed duty drawback structure three times in the post-quota regime from value-based to weight-based in January 2005. This change hit the industry and adversely affected exports.
Later, value-based structure was reimplemented in May, while the drawback rates and value caps were lowered.
As the decreasing drawback rates from 9.5 to 3.6 in January were not enough, revision to 6.5 in May came with a drop in value caps that added fuel to fire, commented Gokuldas Exports Managing Director Rajan Hinduja.
He also added that government policies need to be more open and transparent.
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