The government announced reduction of duty drawback rates on exports of gold jewellery, silver jewellery and certain silver articles by up to 9%, reducing the refunds available to exporters under a revised schedule.
According to the notification by the Finance Ministry on Thursday, the drawback rate for gold jewellery has been lowered to Rs 1,794.11 from Rs 1,851.99, a reduction of 3.1%. The rate for silver jewellery and certain silver articles has been cut to Rs 26,859.02 from Rs 29,501.09, a decline of about 9%.
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Duty drawback is the refund of duties on imported inputs for export items. It serves as a refund mechanism that reimburses exporters for customs and excise duties paid on imported inputs used in manufacturing export goods.
Earlier in July this year, the government nearly doubled duty drawback rates for select categories of gold and silver jewellery exports to improve exporters' competitiveness amid rising input costs and global uncertainties.
The duty drawback for gold jewellery and parts were to Rs 1,851.99 per gram from Rs 773.17 per gram, while the rate for silver jewellery and articles made of silver was raised to Rs 29,501.09 per kg from Rs 14,990.66 per kg.
"Since the Gold and silver price has gone down thereby reducing the realtime import duty on gold and silver, this requires the correction in duty drawback as the duty drawback was not percentage terms but in real terms," said IBJA secretary Surendra Mehta.