The Commerce Ministry has decided to come to the aid of exporters struggling to get pending duty refund claims worth about Rs 5,000 crore from the Finance Ministry.

The Directorate General of Foreign Trade (DGFT), which monitors trade activity, will discuss the matter with the Customs Department to find a solution to the problem, a DGFT official told Business Line .

Exporters claim that duty drawback payments (refund for input duties paid) are not being made since October and the pending amount has risen to almost Rs 5,000 crore.

“This is a serious problem as it could affect the fund flow of exporters and they may not be in a position to meet orders,” the official said.

Finance Ministry officials in charge of drawback payouts have told DGFT officials that the pending claims are part of normal work flow. Exporters, however, are unwilling to buy the argument.

“Normally, pending drawback payment does not exceed Rs 1,000 crore. In our case, it is over Rs 4,900 crore. This is not normal,” said Ajay Sahai, Director-General, Federation of Indian Export Organisations .

Commerce Ministry officials pointed out that Customs officials usually stop making drawback payments from February as they strive to meet revenue targets for the year. “Stopping of payments has never happened this early. This certainly needs to be sorted out,” the official said.

No DEPB Earlier, exporters also had the option of claiming refunds under the Duty Entitlement Pass Book (DEPB) scheme which was administered by the Commerce Ministry. However, the scheme was discontinued some time back and now all exporters have to compulsorily claim duty refunds under the drawback scheme administered by the Finance Ministry.

“One reason why a lot of exporters preferred the DEPB scheme was that the payments were quick. Now, we do not have any option and are at the mercy of the Customs Department,” a Delhi-based exporter, who did not wish to be named , said.

>amiti.sen@thehindu.co.in

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