CHENNAI: Federation of Indian Export Organisations, Southern region on Wednesday urged the Central Board of Excise and Customs to continue duty drawback rates and Rebate of State Levies (ROSL) as the sudden reduction in duty drawback rate will adversely impact the industry.
A Sakthivel, FIEO, chairman of southern region, who met CBEC chairperson, Vanaja N Sarna in New Delhi on Wednesday sought her intervention to continue the duty drawback rates and ROSL. Various industries in the southern region including textiles, leather, agro, pharma had raised apprehensions that they would tend to lose competitiveness to other competing countries due to reduction of duty drawback rates, he said.“Exporters who have already committed orders are facing issues regarding timely refund of the GST,” Sakthivel added.
“The reduction in drawback rates will become another contributing factor to pull down exports in addition to currency. Also, delayed refund of input tax credit has elongated the working capital cycle for textile exporters,” according to a report by
Edelweiss. “We estimate the revised drawback rates to particularly impact margins of home textile and garment sub-segments by about 150-250 bps,” it added.
Meanwhile, the Council for Leather Exports (CLE) had earlier said that the industry would need an additional capital of over Rs 3,000 crore following GST rollout. “Because of GST, there will be an
additional capital requirement of over `3,000 crore and since 80 per cent of businesses in this industry are small scale, they are finding it difficult,” said Mukhtarul Amin, chairman, CLE.