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Updated: December 16, 2013 17:06 IST

Duty refund claims touch Rs. 4,800 cr; impacting exports: FIEO

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A file photo of Rafeeque Ahmed, President of Federation of Indian Export Organisations (FIEO). Photo: P.V. Sivakumar
The Hindu A file photo of Rafeeque Ahmed, President of Federation of Indian Export Organisations (FIEO). Photo: P.V. Sivakumar

Concerned over rising duty refund claims which have crossed Rs. 4,800 crore in the past couple of months, exporters on Monday said that this is impacting shipments and the government must clear the arrears urgently.

“We have been requesting the customs authorities to clear the claims but they do not seem to be responding. They appear to be more concerned about meeting their revenue targets,” Federation of Indian Export Organisations (FIEO) President Rafeeque Ahmed told reporters in New Delhi.

He said that liquidity is a big issue for exports and pending claims of refund of service tax, duty drawback, rebate claims and VAT are affecting exports.

“At present, out of 118 ports, in 103 ports duty drawback claims alone are pending to the tune of Rs. 4,821 crore as against the normal pendency of Rs. 1,000 crore or less,” Mr. Ahmed said, adding, “They (customs authorities) are simply saying that they can not do anything. For them, their revenue target is more important“.

He also said that VAT claims in States like West Bengal, Punjab, Tamil Nadu and Maharashtra are very high.

If the claims continue to rise like this “India may not be able to achieve the desired growth in exports”, he said.

The government is expecting a growth rate of 10 per cent in exports during the 2013-14 fiscal and has fixed a target of $325 billion from overseas shipments.

Mr. Ahmed said that at Jawaharlal Nehru Port, duty refund claims of Rs. 1,593 crore are pending, while at Chennai and Calcutta sea ports they are at Rs. 802 crore and 270 crore.

“SME exporters would be worst hurt due to this,” he said.

He said the global situation is still very fluid with only a few green shoots and it will continue to be uncertain through out 2014.

“Housing market and business spending have slowed in the US. EU is still trying to come out of woods. We are concerned with the instability in middle-east and north Africa and legal disputes with many Latin American governments. Venezuela has imposed many restrictions on current and capital account,” he added.

On the forthcoming RBI policy, Mr. Ahmed said that another increase in rates will act as a dampener for the manufacturing sector and “this will also impact the exports. The cost of credit for exports remained much above the international benchmark blunting the competitive edge of our products“.

On trade with Iran, he said that the government should increase rupee trade with Iran. “Exports have already touched $2.45 billion in first six months of 2013-14. We are likely to touch exports of $6 billion. The mechanism has allowed to diversify India’s exports to Iran,” he added.

However, Indian exporters are facing challenges such as lack of shipping facility and delay in issuance of letter of credit by banks in Iran, Mr. Ahmed said.

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