The revenue impact of the enhanced duty drawback rates has been worked out at Rs 90 billion for an 18-month period. Duty drawback rates for garments would be 7% (revenue impact Rs 38 billion); textile made ups 6% (Rs 28 billion); processed fabric 5% (Rs 9 billion); yarn and grey fabric 4% (Rs 13 billion).
The revenue impact of enhanced duty drawback rates on other category of items exported is estimated at Rs 2 billion. The impact of abolition of customs duty/sales tax on import of raw cotton (at present the rate if 5 percent) and withdrawal of customs duty on man-made fibres and sales tax on import of textile machinery (at present 10 percent) has been calculated within the range of Rs 8-10 billion.
The government had announced trade enhancement initiatives of Rs 180 billion for 18 months starting from January 1, 2017 to June 30, 2018. Under the package, only if exporters show a 10 percent increase in exports after the first six months would they remain eligible for the full amount of the duty drawback.
Copyright Business Recorder, 2017