The Central Board of Revenue (CBR) will save approximately Rs 3 billion as a result of reduction in duty drawback rates on export of 655 items during 2004-05. In this regard, the CBR has started reduction in duty drawback rates of major sectors including textile, leather, sports, surgical, cutlery, plastics and allied products.
The rates of other sectors would be reduced in the second phase, after completion of exercise in major industrial sectors.
Sources told Business Recorder here on Wednesday that the CBR and Input Output Coefficient Organisation (IOCO), Karachi have started revision of duty drawback rates following reduction in duty made in budget on the import of raw materials/inputs used in the manufacturing of finished products to be exported.
Although the exact savings on account of duty drawback reduction can be worked out only on completion of ongoing exercise, it is estimated that the CBR will save around Rs 3 billion following changes in standard duty drawback notifications in 2004-05.
According to a summery prepared by CBR, custom duty has been reduced on 469 industrial inputs under the phased out tariff rationalisation program in budget 2004-05.
Five standard duty drawback notifications cover 655 export items including full range of exportable goods like plastics goods and made-ups and 105 individual notifications cover 450 items. An amount of Rs 14.25 billion was paid as duty drawback in 2003-04.
So far, out of total 655 products, the CBR has slashed duty drawback rates on the export of 142 items. Thus, rates of remaining 513 items would also be reduced in coming days.
The sectors' specialists of IOCO, Karachi has started working on the revised duty drawback rates, sources added.
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