Drawback Circular No. 105/2000-Cus

Dated 20th December, 2000

F.No.609/154/2000-DBK

Government of India

Ministry of Finance

Department of Revenue

Subject : Duty Drawback on Embroidered Silk Garments - regarding

        A representation has been received from the Indian Silk Export Promotion Council, New Delhi, that their exports of beaded and embroidered silk garments are being denied drawback under SS No. 62.06 for the reason that the said entry does not cover embroidered garments, and also under SS No.62.07 on the premise that the garments entered for export are not manufactured by using imported beads and sequins.

2.    The issue has been examined in the Board. It is clarified here that the drawback rate under SS No.62.07 has been determined by taking into account the duty incidence in respect of imported glass beads, sequins, lining and zippers. This rate does not rebate duty incidence on account of silk as the data submitted by the Council for the relevant entry "Natural silk high fashioned ready-made garments..." indicated that the silk used was imported duty free under the Advanced Licence Scheme. On the other hand, the drawback rate under SS No.No.62.06 is intended to rebate duty suffered on the input i.e., silk.

3.    The Board is of the view that the denial od drawback to embroidered silk garments would be against the principle of equity as the exporiers of embroidered silk garment have at least suffered duties on the raw material 'silk'. Therefore, in the interest of the trade, it has been decided that the embroidered garments (including those embroidered with metallised yarn) be given drawback under SS No.62.06. However, for the purpose of granting drawback, the value of embroidery/beads/sequins should be excluded from the total f.o.b. value. The exporters should, therefore, be specifically advised to declare the value of embroidery, beads and sequins separately on the shipping bills.

4.    Suitable Public Notice for information of the trade and standing orders for guidance of the staff may kindly be issued on the above lines.

5.    Receipt of the Circular may please be acknowledged.