India raises duty drawback to boost readymade garment exports

In an effort to boost export of high-value readymade garments (RMG), the Central government has increased the duty drawback of 3.2 per cent to 4.7 per cent, depending on the category, for exports of non-fabric inputs made from imported fabrics under the Advance Authorisation Scheme.

The new duty drawback rates would be effective from the next month.

Exporters shall be eligible for the All Industry Rate of Duty Drawback, for non fabric inputs, as determined by the Central government for this particular scheme. Fabric imports will be subject to pre-import conditions and will be physically incorporated in the export product (making normal allowance for wastage). Only physical exports can fulfil the export obligation.

Authorisation, and the fabric imported, will be subject to actual user condition. The same will apply to non-transferable items even after the completion of export obligations.

Duty-free import of fabric under the Special Advance Authorisation Scheme shall be allowed for export of articles of apparel and clothing accessories for export of items covered under Chapter 61 and 62, subject to the terms and conditions.

The authorisation will be issued based on Standard Input Output Norms (SION) or prior fixation of Norms Committee. The authorisation willl be issued for the import of relevant fabrics including inter lining only as input. No other input, packing material, fuel, oil and catalyst shall be allowed for import under this authorisation.