The three-member committee set up by the government for formulation of all-industry duty drawback rates for 2008-09 has been given more time to submit its report. Official sources said that the committee had sought extension till August 11 and that has been granted. The drawback rates for exporters are worked out and notified every year after taking into account the budgetary changes in excise duty, customs and service tax. 

The all-industry rates of duty drawback are worked out by considering the consumption of input materials and the incidence of duties on these input materials. 

Traditionally, the drawback rates are announced in June or latest by July every year. 

Sources in the export fraternity said that the surge in inflation has led to hike in raw material costs in many industries. 

To add to this knotty issue is the recent depreciation in rupee against the dollar. Both these factors may have prompted the committee to go in for extensive data collection and consultations before announcing the rates, sources added.

Almost 90 percent of the exporters rely on the all-industry drawback rates. The rates are usually applied only on prospective basis. Exporters have been eagerly awaiting the announcement of the drawback rates for 2008-09 and the expectations are that the rates would be on the lower side compared with last year. In March, the Finance Ministry had constituted a three-member committee for the formulation of all-industry duty drawback rates. The Committee comprised Mr Saumitra Chaudhuri, Member of the Prime Minister’s Economic Advisory Council; Mr S.B. Mohapatra, Secretary to the Government of India (retired); and Mr T.R. Rustagi, Chief Commissioner of Central Excise and Customs (retired). Under the duty drawback scheme administered by the Revenue Department, the customs and central excise duty paid on inputs and service tax paid on input services used in the manufacture of export goods are refunded to the exporters in the form of duty drawback. Budget 2008-09 had seen wide ranging changes in excise duties, including a general reduction in the Cenvat rate from 16 to 14 percent. There were also changes in customs duties.