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India Updates
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LEATHER EXPORTERS CALL ON MARAN - URGED DEFERMENT OF REVISED DUTY DRAWBACK RATES
New Delhi ~ June 08 2001
A large delegation of leather export industry led by Shri Irshad Mirza Chairman of the Council for Leather Exports (CLE) called on Shri Murasoli Maran
Union Minister of Commerce & Industry here today. The delegation consisting of Chairman Vice Chairman all Regional Chairmen all product panel chairmen and other leading exporters from across the country made a forceful appeal to the Minister that the new all industry rates of Duty Drawback notified a few days back should be deferred or kept in abeyance lest the export of leather products would be in a serious jeopardy. The delegation impressed upon the Minister that there was absolutely no rationale and reasoning in drastically reducing the drawback ad- valorem rates and ceilings on eligibility.
The very objective of the drawback scheme is to compensate the actual duties suffered on various inputs for the export products. The new rates notified are totally defeating the objective. If new drawback rates are brought into force then there will be a serious set back to the government strategy itself for producing and exporting value-added leather products and also entering the major international markets with high-end quality products. "The exporters expressed their anguish that there was no transparency in deciding the drawback rates particularly when such a drastic revision was contemplated. This is despite the fact that the CLE had given voluminous data justifying upward revision of last years drawback rates" the Chairman said.
The delegation brought to the notice of the Minister that the leather export sector started making a recovery from the serious recession experienced by the industry during 1995-2000. Only during 2000-2001 the sector could make export worth of about Rs.10000 crore. At this stage the new drawback rates have come as a rude shock to the industry. The exporters have already committed to international export orders to the tune of Rs.4000-5000 crore for the next about five months on the basis of the old drawback rates. Hence the new drawback rates if brought into force
will result in heavy monitory loss to the exporters besides seriously hurting the export momentum just picked up. This will also force closer of many production units and loss of employment. Shri Maran noted all the suggestions made by the leather delegation and assured that he would take up the matter with the Finance Minister for immediate consideration of the request to keep the newly notified drawback rates in abeyance.
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