Financial Daily from THE HINDU group of publications
Wednesday, Dec 10, 2003
Financial Daily from THE HINDU group of publications Wednesday, Dec 10, 2003 |
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Industry & Economy
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Tyres Govt allows tyre exporters to claim DEPB on kg basis K.R.Srivats
New Delhi , Dec. 9 TYRE exporters in the country may have cause for cheer. Acceding to their request, the Central Government has allowed fixation of value caps for availing duty entitlement passbook (DEPB) on a per kilogram basis. This is as against the present system, where the Director-General of Foreign Trade (DGFT) fixes uniform value caps for each category of tyres and that too, not for all categories. Thus, exporters of truck and bus tyres were eligible to claim 20 per cent DEPB on free-on-board (FOB) value or the specified value cap of Rs 5,500 per pair (tyre plus tube), whichever was lower. Similarly, the value caps were fixed at Rs 2,200 per pair for `other four-wheelers' and Rs 550 per pair for all two-wheeler tyres. However, there was no specific value cap prescribed for, say tractor tyres. To overcome the classification problems, the Government now fixed the value caps on a weight basisat Rs 90 per kg for all automobile tyres. There has, however, been no change to the DEPB rate, which has been pegged at 20 per cent. This rate would now be applicable for all automobile tyres. Reacting to the Centre's move, a senior tyre industry official said this was a "good simplification" and "operationally viable". "In the earlier dispensation, value caps were fixed for few specific categories of tyres in rupee terms. Every time a new type of tyre was exported, there were classification issues. Some tyres did not have any specified value caps", the official said. The total tyre exports from the country during 2002-03 stood about Rs 1,300 crore. About 60 per cent of the tyre exports is routed through the DEPB scheme, a senior tyre industry official said. The objective of DEPB scheme is to neutralise the incidence of customs duty on the import content of the export product. The neutralisation is provided by way of grant of duty credit against the export product. The DEPB rate, which aims to neutralise the incidence of duty on the inputs used in the export product is applied on the FOB value or value cap, whichever is lower.
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