The Hindu Business Line : DEPB benefits restored for steel items

THE Government has revoked the Duty Entitlement Pass Book (DEPB) scheme for steel items that was suspended in late February by the erstwhile NDA Government aiming at controlling spiralling steel prices.

The Directorate General of Foreign Trade (DGFT), in a notification issued on Monday, stated, "The suspension of DEPB rates made vide public notice No 54 dated February 28, 2004 and public notice No 56 dated March 10, 2004, respectively for the products under the engineering product group stands revoked."

However, there is some confusion on whether the new notification will become effective with retrospective effect or prospective effect.

The spokesman for Steel Authority of India Ltd (SAIL), when contacted, told Business Line, "We are not clear and are trying to ascertain whether the new notification will be effective with prospective or retrospective effect."

In a written statement, however, SAIL stated: "Restoration of DEPB provisions is indeed a welcome move. The steel industry, specially the major exporters, will benefit from it since international prices are reigning quite high. For SAIL, however, the benefit will not be significant since the company is concentrating on domestic sales and has reduced exports substantially."

The Indian Steel Alliance (ISA), an association of the five major steel producing companies in the country, however, is interpreting it to be effective with retrospective effect.

In a written statement, the ISA President, Mr Moosa Raza, has stated: "ISA would like to thank the Government on resumption of DEPB benefits on steel exports with retrospective effect. The resumption of DEPB benefits is a very positive development for the steel industry and will ensure that Indian steel exports remain competitive in the global market.

"The move by the Government will also ensure that the steel industry gets appropriately compensated for all the duties and taxes it pays and continues to be healthy."

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