The government on Tuesday announced the reduction in duty drawback rates for 403 items from April 7, but kept the rates same for 401 other items.

In a notification, the finance ministry said the drawback rates have been reduced on 403 item following slash in customs and excise duties but the rates on 401 other items will continue at the existing rate as there is no change in the duties of inputs used in the export products.

After amendments in the Customs Act, supplies made to the special economic zones are now treated at par with the physical exports.

As a result, Rule 2(e) of Customs and Central Excise Duties Drawback Rules, 1995 have been amended. Accordingly, the exports to SEZs shall be eligible for drawback at the rates specified by the government.

Drawback rates for motor vehicle chassis have been fixed on the basis of data provided by Engineering Export Promotion Council.

In the case of leather goods, the customs duty has remained the same and hence the drawback rates will remain unchanged.

Although the drawback rate on handloom textiles, made-ups made of cotton have not been changed. The rates would be lower for man-made fibres and fabrics.

Since customs and excise rates have been reduced for knitted garments, knitwear and woven garments, woollen, synthetic and silk carpets, the drawback rate has also been pegged down.

The rate remain unchanged for copper, brassware, handicrafts and hardware as the customs duty on the raw materials has not been changed.

In line with Kelkar panel's recommendations, relaxation has been provided in the exports of composite articles.