Indian apparel exporters' body demands duty drawback hike

India’s Apparel Export Promotion Council (AEPC) has called for increase in duty drawbacks of about 4-4.5 per cent to mitigate embedded taxes paid by exporters. Exports of apparel have declined after the implementation of the goods and services tax (GST) due to lowering of the duty drawback rate from 11 per cent to 3.7 per cent and non-disbursement of the drawbacks.

“We are paying embedded taxes in products like seeds, besides electricity duty and taxes on diesel, but are unable to recover them, which is weakening our competitiveness," AEPC chairman H K L Magu was quoted as saying by a news agency.

He was speaking recently on the sidelines of Indian Chamber of Commerce-organised Retail India Summit.

Magu said if the government agrees to their demand of raising the duty drawbacks or GST refunds, it would translate to around a ₹5,000-crore boost for the sector. In the first nine months of the current fiscal, the sector registered a decline in exports compared to the previous fiscal.

It is only since October that things have started looking positive, as demand is rising and GST refunds have started getting released, Magu said.

He said fiscal 2018-19 is likely to be flat for apparel exports at about $17 billion, if the growth trend sustains for the remaining months.

The month of November saw a jump of 20 per cent in rupee terms and 9 per cent in dollar terms compared to November 2017, he added. 

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