The Hindu Business Line : Validity of duty pass book scheme extended again

New Delhi April 1 The Centre has extended the validity of the duty entitlement passbook (DEPB) scheme till March 31, 2008. The DEPB scheme was to lapse on Saturday.

This is the second extension of the scheme, which serves about 30 per cent of the country's merchandise exports in value terms. Merchandise exports are expected to touch $125 billion during fiscal 2006-07.

After specifying March 31, 2006 as the terminal date for DEPB scheme, the Centre had extended its validity to March 31, 2007 and now to March 31, 2008.

The Federation of Indian Export Organisations (FIEO) President, Mr G.K. Gupta, welcomed the latest extension. This would provide more time for the Centre to work out a new duty neutralisation scheme to replace the DEPB scheme if it desired, exporters said.

FIEO is, however, still keen that the exporting community be given six months lead-time (transition period) to switchover to any new scheme that may be formulated by the Centre.

A three-member Committee set up by the Prime Minister's Office (PMO) under Planning Commission Member, Mr Anwarul Hoda, had made a case for extending the scheme for three more years with a six-month phase-in as and when a new scheme is devised. The committee report was submitted to the PMO in the third week of February.

An earlier attempt in 2006 by the Commerce Ministry to come up with a replacement scheme for the DEPB scheme did not find approval of the Law Ministry, as the new scheme sought to neutralise State-level levies like electricity duty besides Central sales tax.

Asked about the incompatibility of the DEPB scheme under the WTO regime, the Commerce Secretary, Mr G.K. Pillai, told Business Line that only 60 cases have come up out of 7,200 tariff lines in all. "Almost all the cases have come from two countries - EU and the US. This is because they are duty entitlements rather than drawback," he said.

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