Exporters want duty entitlement scheme extended

Our Bureau Mumbai | Updated on August 16, 2011 Published on August 16, 2011

Exporters have appealed to the Government not to abolish the Duty Entitlement Pass Book (DEPB) scheme on September 30 and extend it till the Goods and Service Tax (GST) is implemented. Owing to the industry demand in June the Government had put off its plan to scrap the 14-year-old DEPB scheme.

The DEPB is a reimbursement of basic and special customs duty paid by an exporter on an imported input used for producing the export product. The benefit is given by way of a grant of duty credit against the product exported at specified rates.

Sectors benefitted

Mr Harshad Bhayani, President, Indian Exporters Forum, said the DEPB scheme is extremely popular among exporters and covers about 52 per cent of exports. India's exports between April and July jumped 54 per cent to $108.3 billion mainly due to good performance by petrochemical products, gems and jewellery and electronic goods.

Some major sectors that have benefited from the DEPB scheme are engineering products, chemicals, plastics, leather, sports goods, food products, handicrafts, electronics and textiles.

Apart from DEPB, other avenues for incentivising exporters include Duty Drawback Scheme and Advance Authorisation Scheme. As the benefits under DEPB scheme are availed after completion of export obligation, there was no possibility of any misuse or litigation with Customs or Licensing Authorities, said Mr Bhayani. The Government wants exporters to switch completely to duty drawback scheme as some industries are benefited more than others in the DEPB scheme.

Small scale industry

Manufacturers from small scale industry preferred DEPB as they do not import bulk quantity under Advance Authorisation Scheme, while fixation of Duty Drawback Rate was time consuming and a lengthy process, hence, economically not viable in many cases. Small manufacturers could opt for indigenous material for their export product and still avail benefit of DEPB scheme, he said.

Mr Nemish Sayani, former Chairman of Plastic Export Promotion Council, said given the uncertain global and domestic economic situation it is imperative for the Government to have a stable export incentive regime.

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Published on August 16, 2011
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