The gold and silver jewellery exporters heaved a sigh of relief with the Government of India’s (GoI) decision to specify the drawback rates for export of gold and silver jewellery. With the imposition of the specified drawback rates, exporters will be able to avail a refund of the tax, which is imposed on the raw materials used during the manufacturing of such export goods.

According to the Finance Ministry, Rs 22.60 would be considered as the drawback rate for every gram of gold, while the drawback rate for silver jewellery would stand at Rs 1,030 for every gram, applicable only on jewelleries to be exported. However, no drawback rates would be specified for gold and silver exports that are under the tax-free scheme of import, replenishment or procurement from the domestic market.

Change in GoI’s plans   

Along with gold and silver jewellery in the drawback schedule, six new entries have been included such as wooden bats, bells, leather safety footwear with metal toe protection, picture frames made of aluminium, iron and steel, perfume bottles, glass lamps and lanterns, gongs and statuettes, among others.

“Although GoI was initially considering revision of the drawback rates, it has now decided to retain the existing drawback rates, as decided in August 2008, for the current financial year for items that are included in the drawback schedule,” says Shekhar Gupta, manager of Overseas Private Limited, a mid-sized gold export company in Jharkhand.

Exporters disenchanted

“The decision undertaken by the GoI has dealt a severe blow to exporters, who were anticipating an increase in the revised drawback rates,” says Vinod Randhwa, proprietor of Imperial Exporters, a small-sized silver export company in Jodhpur. However, now the exporters have no other alternative but to wait until the next announcement is made by GoI during the next Union Budget.

Sabrina Mitchell