"The enhanced rates of tax refunds through Duty Drawback Scheme on nearly all products have been made effective from April 1 and will cost Rs 800 crore (Rs 8 billion) to the Centre exchequer," Finance Secretary D Subbarao told reporters.
The impact of tax paid on services used as inputs in the manufacturing or processing of exports has been factored in duty drawback rates, he said.
Another package for all small-scale enterprises and other nine sectors would have revenue implication of Rs 600 crore (Rs 6 billion), the finance secretary said.
This package relate to concessional pre-shipment and post-shipment credit by banks for SMEs, textiles, ready-made garments, leather products, handicrafts, engineering products,
processed farm products, marine products, sports goods and toys.
Now, banks will charge interest rate not exceeding Benchmark Prime Lending Rate minus 4.5 per cent on pre-shipment credit up to 180 days and post-shipment credit up
to 90 days on the outstanding amount till December, Financial Sector Secretary Vinod Rai said.
At present, banks charge interest rates not exceeding BPLR minus 2.5 per cent on these two kinds of credit, he said, adding the government would provide two per cent subvention to banks through the Reserve Bank of India.
To a query, Subbaroa said the package would enable the country to meet exports target of 160 billion dollars for the current fiscal.
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