IN A move that will expedite payment of pending drawback amount to exporters, the finance ministry has agreed to provide additional duty drawback announced in June this year without insisting on submission of fresh documents. The drawback rate for several products was enhanced in the first export-promotion package finalised by the government to fight rupee appreciation, but exporters have not been given the extra drawback that they were entitled to due to the enhanced rates since the revenue department insisted on submission of more documents.
Exporters had argued that applying afresh for the enhanced amount would require huge paperwork and submission of several sets of documents. This was completely unnecessary as all requied documents were already filed by exporters while claiming drawback at the old rate. The government just needed to change the rate at which the drawback was to be given to get the new set of figures. The issue was taken up by the Delhi Exporters Association (DEA) with revenue secretary P V Bhide and officials of the Central Board of Customs & Excise (CBEC).
Duty drawback is the refund given to exporters for all input taxed paid by them. It is understood that the revenue department has now agreed it would not insist on supplementary documents in the case of shipments cleared through the electronic data interchange (EDI) system as additional entitlement can be calculated using date stored in the customs EDI database. In the case of non-EDI shipping bills, exporters may still have to submit all papers.
The finance ministry has agreed to clear drawback on an automatic basis, DEA president S P Agarwal said. This means the additional drawback would be calculated on the basis of the documents submitted earlier to obtain drawback at the original rates. The difference between the original drawback and the enhanced entitlement would be credited to the accounts of exporters directly.
The government had announced a relief package to exports to help them manage appreciation of the rupee and hike in drawback rates was one the measures announced. Mr Agarwal said exporters would have to submitted customs attached invoice, export promotion copy of the shipping bill, bank attested invoice, bank realisation certification and copy of airways bill if drawback was not credit automatically. This would have resulted in huge paperwork and delayed disbursal of drawback.
“There will be no need for a supplementary claim. The original claim would be the basis for paying additional drawback, Mr Agarwal said. The DEA welcomes the move since it will help a lot of small and medium-sized exporters throughout the country, he added.
Since there are 10 lakh drawback claim from April to July, insisting on supplementary documents would have meant exporters submitting 50 lakh more documents. Processing such huge volumes of documents would have taken time, Mr Agarwal said. Therefore, DEA suggested that the customs department should fine-tune its computer system to calculate the additional entitlement arising out of the government’s export package.