In push for exporters, government claims will be cleared within shorter period now

Mumbai: In what is set to impact several exporters the government on Thursday reduced the period in which certain benefits have to be accrued to them

The government said that the duty drawback claims have to be processed within a timeframe. The time frame was reduced from 7 days to three days. Duty drawbacks are essentially refunds that can also be set off against future liabilities.

Tax experts say that this move is set to improve the cash flow situation of exporters.


“The governments instruction to further reduce the timeline for crediting at least 90% of the duty drawback claims to the exporters from 7 days to 3 days, will definitely help to improve the cash flow position of various industry players involved in exporting goods out of India, especially in these COVID times when a large number of businesses are still facing liquidity crunch,” said Abhishek Jain, Tax Partner, EY India.

Many exporters have been complaining on how their cash flows have been impacted in the Covid pandemic. This also comes at a time when India’s exporters too have been under stress.

The government also wants to reduce the pendency of these claims. In most situations claiming the benefits of duty drawback tends to take time. The decision to reduce the window to process these claims would also put pressure on the officials to process it under the timeframe.