The Government has announced hike in Drawback and DEPB rates for exporters to compensate the exporters against falling dollar value vis--vis Indian Rupee.

DEPB rates have been hiked by 3 per cent for textiles(including handloom), readymade garments, leather products, handicrafts, engineering products, processed agricultural products, marine products, sports goods and toys-For rest of items DEPB rates have been hiked by 2 per cent.The rate of interest on pre and post shipment credit lowered by 2 per cent

Drawback rates have also been hiked by 10 to 40 per cent of existing rates. In the case of silk, the drawback rate for higher quality silk fabrics is being increased from 8.3% with a drawback cap of Rs.250/kg to 10.8% with a drawback cap of Rs.325/kg.

The new drawback rate for grey cotton yarn of less than 60 counts is 5.4% with a cap of Rs.11/kg as against the existing rate of 4% with a cap of Rs.8/kg. The new rate for dyed cotton yarn of less than 60 counts is 6.5% with a cap of Rs.18/kg. In respect of cotton yarn of 60 counts and more, a higher rate of 8.8% / 9.9% with a cap of Rs.26 per kg / Rs.33 per kg is being provided depending upon whether the yarn is grey or dyed. As for cotton fabrics, the new rate is 6.4% (grey) / 7.7% (dyed) with a drawback cap of Rs.19 per kg (grey) / Rs.28 per kg (dyed) as against the existing rate of 4.7% (grey) / 5.7% (dyed) with a cap of Rs.14 per kg (grey) / Rs.20.5 per kg (dyed).

The new drawback rate for hand knotted woolen carpets is 12.5% with a cap of Rs.700 per sqm. as against the existing rate of 9.4% with a cap of Rs.565 per sqm. For silk carpets, the new drawback rate is 15.5% with a cap of Rs.2750 per sqm. as against the existing rate of 11.8% with a cap of Rs.1600 per sqm. The drawback rate on cotton durries is fixed at 11.5% with a cap of Rs.26/kg as against the existing rate of 9.4% with a cap of Rs.20/kg.

In the ready made garment sector, the new drawback rate for knitted blouses/shirts/tops of cotton is 10% with a cap of Rs.48 per piece as against the existing rate of 7% with a cap of Rs.31 per piece. The new rate for knitted blouses/shirts/tops of man-made fibre is 11.5% with a cap of Rs.48 per piece as against the existing rate of 8.1% with a cap of Rs.34 per piece. For knitted blouses/shirts/tops of cotton and man made fibre blend, the new drawback rate is 10.7% with a cap of Rs.48 per piece as against the existing rate of 7.5% with a cap of Rs.32 per piece. The drawback rates on woven garments are being revised on similar lines.

In the made up category, the new drawback rate for bed linen, table linen, toilet linen, kitchen linen and curtains of cotton is 9.1% with a cap of Rs.110 per kg as against the existing rate of 6.4% with a cap of Rs.64 per kg. The new drawback rates on made-ups of manmade fibres and made-ups of silk/wool are also being revised upwards. The new rates are 10.4% and 9.8% respectively as against the existing rates of 7.5% and 6.9%.

The new drawback rate for finished leather is 7.5% with a cap of Rs.8 per sq.ft. as against the existing rate of 6.6% with a cap of Rs.7 per sq.ft. Likewise, the new drawback rate for leather footwear for adults is 11.5% with a cap of Rs.105 per pair as against the existing rate of 9.5% with a cap of Rs.85 per pair. In the case of leather apparels the rate provided is 11.4% with a cap of Rs.650 per piece as against the existing rate of 9.5% with a cap of Rs.533 per piece. The drawback rates on other leather items viz. suit cases, handbags and gloves are also being revised upwards.

In the case of stainless steel utensils, the rate is being revised upwards from 15% to 17% with varying caps depending upon the quality of utensils. Taking into account the duty incidence and prices of inputs, the drawback rate on brass builder hardware and handicrafts of brass is being increased from 15% with a cap of Rs.75/kg to 18% with a cap of Rs.110/kg. The same is the case with artware/handicrafts of copper where the drawback rate is being increased from 15% with a cap of Rs.110/kg to 18% with a cap of Rs.155/kg.

In the case of stainless steel cutlery falling under Chapter 82, the drawback rate is being increased to 17% in line with duty drawback on stainless steel utensils. The same is the case with brass hardware items and other similar items under chapter 83 where the drawback rate is being provided at 18% on par with brass handicrafts.

The drawback rates on bicycles and bicycle parts are being revised upwards taking into account the duty incidence on inputs and the current FOB realization on exports. The new rates are 13% for bicycles and 13%-15% on parts thereof. The increase is in the range of 15.4%-18.2% vis--vis the existing rates. The drawback rates on sports goods are also being revised upwards in the range of 17% to 40%. In deference to the request made by trade, the drawback rate on the residual heading for sports goods is being increased from 1% to 4%. This will help many small exporters. The drawback rates on toys is also being raised to 6% from the existing level of 2.1%.

The drawback rate on writing instruments has been revised upwards. In respect of ball point pens the rate is being increased from 7% with a cap of Rs.75 per 100 pcs to 8.5% with a cap of Rs.225 for 100 pcs. The drawback rate on felt tipped pens is also being increased from 12% with a cap of Rs.200 per 100 pcs to 13.3% with a cap of Rs.275 per 100 pcs.

The drawback rates on other items are also being revised upwards. Responding to requests from exporters some additional lines have been introduced in the Drawback Schedule. These include leather-cum-synthetic / textile footwear upper, coir mats, parts of electrical apparatus made of copper / brass, handicraft / artware of stainless steel and certain dye & dye intermediates.

The rate of interest on pre and post shipment credit has also been lowered by 2 per cent.