Export body wants Customs duty rebate scheme to stay

Our Bureau New Delhi | Updated on May 10, 2011 Published on May 10, 2011

Mr Ramu S Deora, President, FIEO.

Government should continue with DEPB scheme till goods and services tax is introduced— Mr Ramu S. Deora, FIEO President

The Federation of Indian Export Organisations has said that uncertainty over Duty Entitlement Pass Book Scheme may lead to the grim possibility of exports dipping to $200 billion in the current fiscal.

“Government should continue with DEPB scheme till GST (goods and services tax) is introduced. If DEPB is not corrected then, exports may fall below $200 billion,” Mr Ramu S Deora, President, Federation of Indian Export Organisations (FIEO), said.

Under the DEPB, the incidence of customs duty on import content of export products is neutralised and reimbursed to the exporters.

The Government has set an export target of $312 billion for 2011-12, pegging growth at 26.7 per cent as against 2010-11. India's exports grew 37.6 per cent in 2010-11 at $245.9 billion, surpassing the Government's original target of $200 billion.

“We believe that the uncertainty over DEPB scheme will impact exporters of engineering, chemicals, textiles and marine products to a very large extent as these segments of exports are predominantly dependent on DEPB scheme,” Mr Deora added.

Exporters have been pleading with the government that either the scheme should remain or it should be replaced with a suitable alternative. The annual payout on this head to exporters is Rs 8,106 crore.

Mr Deora said when the government had announced that DEPB would discontinue from June, it assured exporters that they would benefit from the proposed GST.

“GST is now delayed. Either the DEPB should be extended, if not all the products covered under it may be brought under the all-industry drawback scheme in the same rates. Government must announce it immediately, otherwise we will lose orders,” he added.

Mr Deora also spoke on the continuing bottlenecks of infrastructure. “The infrastructure is already reeling under pressure and may crumble with increasing volumes. A 28 per cent growth in air cargo at Delhi airport has created havoc with air shipments delayed by over a week resulting in panic among exporters. There are similar problems at other ports and airports.”

Published on May 10, 2011
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