Current trends and govt actions:

Draw Back policy in Export of Sports goods and toys

Drawback, in law in commerce, paying back a duty previously paid on exporting excisable
articles or on re-exporting foreign goods. The object of a drawback is to let commodities
which are subject to taxation be exported and sold in a foreign country on the same terms as
goods from countries where they are untaxed. It differs from a bounty in that a bounty lets
commodities be sold abroad at less than their cost price; it may occur, however, under certain
conditions that giving a drawback has an effect equivalent to that of a bounty, as in the case
of the so-called sugar bounties in Germany (see sugar). The earlier tariffs contained elaborate
tables of the drawbacks allowed on exporting or re-exporting commodities, but so far as the
United Kingdom is concerned (as of 1911) the system of bonded warehouses practically
abolished drawbacks, as commodities can be warehoused (placed in bond) until needed for
exportation.
Duty Drawback
Duty Drawback is the rebate of duty chargeable on imported material or excisable material
used in the manufacturing of goods in and is exported. The exporter may claim drawback or
refund of excise and customs duties being paid by his suppliers. The final exporter can claim
the drawback on material used for the manufacture of export products. In case of re-import of
goods the drawback can be claimed.
The following are Drawbacks:
Customs paid on imported inputs plus excise duty paid on indigenous imports.
Duty paid on packing material.
Drawback is not allowed on inputs obtained without payment of customs or excise duty. In
part payment of customs and excise duty, rebate or refund can be claimed only on the paid
part.
In case of re-export of goods, it should be done within 2 years from the date of payment of
duty when they were imported. 98% of the duty is allowable as drawback, only after
inspection. If the goods imported are used before its re-export, the drawback will be allowed
as at reduced percent.
Challenges
These calculations can be cumbersome and time consuming. In addition such calculations can
also be error-prone, if done manually. Automation is used these days accurately determine
the drawbacks.



Foreign Trade Policy 2013 - 14 announced



HIGHLIGHTS OF ANNUAL SUPPLEMENT (2013 - 14) TO THE
FOREIGN TRADE POLICY 2009 - 14
1. Incremental Exports Incentivisation Scheme
2. Widening of items eligible for import for Handloom/Made ups and Sports Goods - %
additional items have been added
(i) PVC Leather Clot (to be used in the manufacture of Inflatable Balls
& Sports Gloves)
(ii) Latex Foam (to be used in the manufacture of Shin Guard & Goal
Keeper Gloves & other Sports Gloves)
(iii) Peva / Eva Foil (to be used in the manufacture of Shin Guard &
Sports Gloves)
(iv) Stitching Thread (to be used in the manufacture of Inflatable balls
& Sports Gloves)
(v) Printing Ink (to be used in the manufacture of Inflatable balls &
Sports Gloves).
3. Recredit of 4% SAD :
Utilization of recredited 4% SAD scrips shall be allowed upto 30.09.13
as a tradefacilitation measure. However, no further extension shall be
considered by Governmentand this would be the last such opportunity.
The importers are advised to make the initial payment of4% SAD in
cash in future if they want a refund.
4. Ease of Documentation and procedural simplification:
It has been decided to dispense with submission of hard copy of EP
copy of shipping bills in case of (a) advance authorization, (b) duty
free import authorization for grant of Export Obligation Discharge
Certificate (EODC) if exports are made through EDI ports.
5. Facility to close cases of default in Export Obligation
Requests have been received for grant of relief to close cases where
there is default in export obligations pertaining to advance
authorizations and EPCG authorizations. It has been decided to allow a
facility to close such cases after payment of required duty, along with
applicable interest. The duty + interest have to be paid within a limited
period of six months from the date of notification of this scheme. The
total payment shall not exceed two times the duty saved amount on
default in Export Obligation.
6. Market and Product Diversification
Norway has been added under Focus Market Scheme and Venezuela
has been added under Special Focus Market Scheme. The total number
of countries under Focus Market Scheme and Special Focus Market
Scheme becomes 125 and 50 respectively. Approximately, 126 new
products have been added under Focus Product Scheme. These
products include items from engineering, electronics, chemicals,
pharmaceuticals and textiles sector.

7. Revised Market Development Assistance Scheme - In a major push to market
development in International trade, Government has revised some of the guidelines in
the MDA scheme:
a. Exporting companies with an FOB value of exports of up to Rs. 30 crores in
the preceding year will be eligible for MDA assistance now. (Earlier this limit
was of 15 crores.) No such ceiling is applicable for participation in Focus LAC
region.
b. The revised guidelines have also substantially enhanced in the financial ceiling
for participation in Trade Fairs & Exhibitions from Rs.1,80,000/ -to
Rs.2,50,000/- (for Focus Latin American countries), from Rs.1,50,000/-to
Rs.2,00,000/-(for focus African countries, focus CIS countries, focus ASEAN,
Australia and New Zealand) and from Rs.80,000/-to Rs.1,50,000/-(for general
areas).
c. For EPC etc. led BSMs only air-fare by Economy Excursion class up to a
maximum of Rs. 70,000 (Rs. 1, 00,000 in case of Focus LAC) shall be
permissible.



Ref & Bibliography:
1. http://www.sportsgoodsindia.org/DrawbackRates.aspx
2. http://en.wikipedia.org/wiki/Drawback
3. http://www.sportsgoodsindia.org/UploadFiles/Newsletter/319194Newsletter-
%20June.pdf