NEW DELHI: The Central Board of Excise and Customs (CBEC) has asked the Export Promotion Councils, Commodity Boards and Trade and Industry Associations to submit their views on the duty drawback rates by March 15.
"In order to ensure smooth transition to GST framework, the Drawback Committee is to formulate and recommend revised All Industry Rates (AIRs) of drawback on rebate to be implemented for exports in the context of new GST environment," it said.
Once the GST is implemented, the duty drawback norms, under which an exporter is compensated for duties suffered during the course of production of goods, too would be required to be aligned with the new indirect tax regime.
Duty drawback rates or AIR of drawback take into account relevant broad parameters, including prevailing prices of inputs, input-output norms, share of imports in input consumption, the rates of central excise and Customs duties, incidence of service tax paid on taxable services which are used as input services in the manufacturing or processing of export goods and value of export goods, among others.
Indirect tax reform goods and services tax (GST) would subsume excise, service tax, VAT and other local levies to create a seamless market across the Country.
The Government plans to roll out the GST from July 1.
The GST is expected to bring about reduced tax exemption, which could have a bearing on prices of goods and capital requirement for managing cross-border supply chains.
It will also mean reduced duty benefit claimed on imports and reduced export incentives and drawback on exports, experts said.
Exporters have been demanding ab initio exemption from payment of taxes under the GST regime, saying delay in refunds often takes months and also results in blocking the working capital.
They also stated that exports need to be encouraged in view of the global slowdown.
Source: Dailyshippingtimes.com
