In a move to boost the country’s gems and jewellery exports, the finance ministry hiked the duty drawback rate on gems and jewellery by nearly 31 percent to Rs 227.20 per gram of net gold content, against Rs 173.20 in June. The incentive scheme now stands over 100 per cent higher than Rs 100.70 in 2012-13.
Duty drawback is the reimbursement of excise and customs duty and service tax on the imported inputs used in the manufacture of exported goods and the recent step will also provide relief to the jewellers by neutralizing the effect of increase in import duty on gold and silver. In order to contain rising gold imports, the government has recently raised import duty on gold to 10 per cent from 8 per cent set earlier. Further, import duty on silver was also raised to 10 percent from 6 per cent.
Indian total exports grew by nearly 13 per cent in August, but gems and jewellery exports still reflect negative numbers for the current fiscal. Meanwhile, the Federation of Indian Exporters (FIEO) expects that with the revision in drawback rates, annual exports of this sector will also register a positive growth in coming future.
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