Government’s revised duty drawback rates applauded by apparel exporters

Cotton T-shirts now had a drawback rate of 3.1 per cent, up from the previous 2.1 per cent. Similarly, rates for man-made T-shirts increased by 0.5 per cent, and there was a slight increase in rates for blended and cotton babies’ garments.

The Government announced revisions in the rates of duty drawback, with several products experiencing significant increases. It was revealed that Cotton T-shirts now had a drawback rate of 3.1 per cent, up from the previous 2.1 per cent. Similarly, rates for man-made T-shirts increased by 0.5 per cent, and there was a slight increase in rates for blended and cotton babies’ garments.

Concerning the drawback value cap per unit, notable changes were made. For babies’ garments, the cap was revised to Rs 29.4 from the previous Rs 13, and for blended babies’ garments, the cap increased from Rs 6 to Rs 12.5. This revision occurred more than three years after the last update, which took place on January 28, 2020.

A recent notification from the Department of Revenue, Ministry of Finance, Government of India, announced these changes in the Drawback schedule. According to the notification, these revisions would be effective from October 30, 2023.

Additionally, the notification specified that for tariff items in Chapters 60, 61, 62, and 63 of the schedule, a blend containing cotton and man-made fibre should have more than 15 per cent but less than 85 per cent man-made fibre by weight. Similarly, a blend containing wool and man-made fibre should have more than 15 per cent but less than 85 per cent man-made fibre by weight. If a garment or made-up item is made of cotton, wool, man-made fibre, or silk, it must consist of 85 per cent or more of the respective fibre by weight.