The Hindu Business Line : DEPB scheme for steel with prospective effect

THE Government on Wednesday clarified that the Duty Entitlement Pass Book (DEPB) scheme for the steel sector is to be revived with prospective effect and not retrospectively.

According to official sources, the steel exporters have also been informed verbally that the DEPB suspension order will stand cancelled from the date of notification.

The industry as a whole, as per available estimates, stands to lose around Rs 150 crore in case the DEPB is revived with prospective effect. This is because the steel companies would not then be able to claim their entitlements for exports made during the suspension period.

The companies, however, when contacted, said that they had not received any communication from the Director General of Foreign Trade to this effect. The President of the Indian Steel Alliance, Mr Moosa Raza, also told Business Line, "we will have to cross check it''.

However, confusion continues to prevail as Government officials were not prepared to be on record about their communications with the steel companies.

Sources, however, indicated that the industry is expected to take up the issue at the political level with the Minister for Commerce and Industry, Mr Kamal Nath. "If the industry takes up the issue with the Minister, then he may, in turn, take it to the Finance Minister," sources said.

According to information, in an internal discussion between the Ministry of Commerce and the Revenue Department, the department is said to have expressed its inability to accept a revenue loss by way of retrospective revival of the DEPB benefits.

The Government, meanwhile, has also released steel export figures for 2003-04.

According to the data, export of steel (primary and semi-finished iron and steel bar/rod etc) has almost trebled in value terms from Rs 3,501 crore in 2001-02 to Rs 8,517 crore during 2003-04 (April-November 2003). In quantitative terms, exports have gone up from 32,76,909 tonnes in 2001-02 to 36,05,594 tonnes in 2003-04.

The Apex Chamber of Commerce and Industry (Punjab) has urged the Government not to revive the DEPB scheme on steel so as to discourage exports and ensure adequate availability in the domestic market.

The previous NDA Government had withdrawn DEPB to reduce pressure on prices but the UPA Government is allowing producers to avail themselves of the scheme. This has adversely affected the steel consumers, the Chamber said in a release here.

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