Ministry may make extra drawback automatic

Exporters hit by the appreciating rupee may not have to file supplementary claims to get the additional benefit of the increase in duty drawback rates.

The finance ministry is likely to disburse the benefits through an automatic mechanism, a move that will save time and reduce transaction costs for exporters. The rates were increased in July.

"We are developing a software for automatic disbursal of supplementary duty drawback claims," said a finance ministry official.

However, no time period has been fixed for automatic disbursals. The duty drawback scheme entails refund of excise duty and Customs duty paid on inputs.

Duty drawback rates were increased (by up to 3 per cent) by the finance ministry with retrospective effect from April 1.

However, according to the existing rules, exporters have to file supplementary claims to get the benefit of the increased duty drawback rates for the period between April 1 and July 12, when the rates were raised. For each drawback claim related to the period, an exporter has to attach six documents.

"According to our estimates, around one million supplementary claims were filed between April and mid-July. Thus, the Customs department will have had to deal with six million supplementary claim documents, which have to be matched with the original documents. This will be time-consuming and automatic duty drawback disbursal is needed," said SP Agarwal, president of the Delhi Exporters Association.

The Federation of Indian Export Organisations, the apex body of exporters, had earlier written to the finance ministry asking it to make the process automatic.