2) Export incentives that are misused to overinvoice exports are: duty drawbacks, concessional export finance, and income tax rebate.
The World Trade Organisation (WTO) does not treat duty drawbacks at final stages and early stages of export production as "export subsidy".
Taking immediate cognizance of the situation, the Government offered a major fiscal relief to exporters by freezing duty drawback rates at the level of 1st October, 2001.
To further alleviate the difficulties of exporters, the backlog of duty drawback which accumulated during the second half of last fiscal year was cleared by 31st January, 2002 in addition to the current payments of duty drawback.
rates of the engineering industry will be reviewed, covering all inputs included fuel oil while calculating these rates.
This is why, today, we are confronted with the problem of limitations of the procedure on duty drawbacks
If duty drawbacks
are lost because of administrative mistakes in applying drawback procedures, it seems such costs should be expensed currently much like discounts lost are expensed when mistakes occur in the company's accounts payable function.
So the utmost priority for the government should be providing maximum incentives for stimulating investment in manufacturing and agriculture sectors such as liberal tax concessions, lower mark-up, further deregulation of the economy, accelerated privatisation of state-owned enterprises, quick disposal of duty drawbacks
and refunds cases improvement in the working of Central Board of Revenue, more simplified tax procedure, etc.
Other customs-related reforms include outsourcing customs valuation functions to pre-shipment inspection companies, simplifying and enhancing the institutional setup for the duty drawbacks
, and bringing customs valuation into conformity with General Agreement on Tariffs and Trade Article 7.