New Delhi, June 22 (KNN) In order to boost country’s jewellery exports, the government has increased the duty drawback rate by Rs 73 to Rs 173.7 per gram on gold ornaments.

According to the Central Board of Excise and Customs (CBEC) notification, the drawback or tax refund rate for articles of jewellery and parts thereof, made of gold is Rs 173.70 per gram of net gold content (.995 or more purity) in the jewellery which earlier was Rs 100.70 per gram.

The government had raised import duty on the precious metal to 8 per cent with an aim to curb the gold demand. The RBI has also put restrictions on banks imports of gold.
India’s trade deficit widened in May as gold imports rose and exports contracted, further pressurizing the current account deficit (CAD).

However, the recent measures announced by the government and the central bank could stem the demand for gold and narrow the deficit in the coming months, said some economists.

Trade deficit, or the difference between merchandise exports and imports, rose to USD 20.1 billion in May, from USD 17.8 billion in April and USD 16.9 billion in the year-ago period.

On a year-on-year basis, while overall exports contracted in May for the first time in five months, by 1.1 per cent to USD 24.5 billion, imports rose 7 per cent to USD 44.65 billion.

The rise in imports was mainly on account of a near 90 per cent surge in gold imports to USD 8.4 billion during the month, but this was slower than the 138 per cent growth in April.

Cumulatively, in April-May the import of precious metal stood at USD 15.88 billion.

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. (KNN)