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Mohan Padmanabhan

Kolkata , Nov. 5

A TRANSITION period of at least six months must be granted to the exporting community, whenever it is decided to put in place the merged scheme in addition to the DEPB (Duty Entitlement Pass Book) scheme.

This is necessary so that exporters can incorporate the changes effected under the new scheme (said to come into effect from January 1, 2006), while negotiating their contracts with overseas buyers.

The above has been recommended by the special task force set up under the reconstituted Board of Trade, headed by Mr Rakesh Shah, Chairman of the Engineering Export Promotion Council (EEPC), to study the impact of the various export schemes on the country's export competitiveness.

Mr Rakesh Shah told Business Line that though the DEPB Scheme was meant to only neutralise the duty incidence, it also addresses partly the high transaction costs, which exporters had to bear. He felt the proposed new scheme must also address the disability factors faced by exporters within the country.

Describing DEPB as most popular scheme among exporters, Mr Shah said it should not be replaced by another scheme, but rather, "it should be further strengthened to support exporters, at least until there was sufficient reform in the domestic tax structure which can create the path for a more efficient replacement of DEPB."

Elaborating on the customs checks, he said while verifying DEPB, it had been found that Customs once again went through the entire process of assessment such as checking with regard to admissibility of DEPB, correctness of the f.o.b. value declared on the shipping bills and so on, already completed before shipments. He suggested that the customs should restrict themselves to verifying only the genuineness of the shipping bill, based on which the instrument has been issued. He felt the verification process should be completed within three weeks since submission of papers.

Mr Shah said if exports had to register a quantum jump, greater co-operation between customs and central excise agencies was a must. He suggested that revenue not collectible for imports under duty exemption schemes might also be considered towards fulfilment of targets, along with the actual duty collected. This may bring about a sea change in the mindset of exporters about foreign trade, he added.

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