10:59 am
Jack
NEW DELHI : In a move towards tightening fiscal policies, the government on Friday announced putting an end to the Duty Entitlement Passbook Book Scheme (DEPB), effective October 1. The revenue forgone to exporters last year on account of DEPB was to the tune of Rs 8,700 crore. Exporters who will be affected are from the engineering sector, including auto and auto component industry, chemicals, pharma, textile and the marine sectors.
The finance ministry has, however, said the withdrawal of the export promotion scheme would not affect revenues as exporters would be allowed to claim benefit from duty drawback, the list of which has been expanded to 4,000 items now. All the 2,130 items from the DEPB scheme have been incorporated into the duty drawback schedule.
Though 1,030 items from the DEPB list were already figuring in the drawback schedule , now 1,100 additional items have been incorporated. These items will, however, suffer lower drawback rates. "The refunds would be reduced by 1-3 %," finance secretary R S Gujral said. Asked if this was the beginning of withdrawal of stimulus and other export promotion schemes, chairman of Central Board of Excise and Customs S D Majumdar said, "We have no plans to discontinue with any other export promotion schemes for now."
Raising DEPB rates were among a slew of measures the government had announced after the global financial crisis hit India. Stimulus included interest rate subvention, additional fund allocation for certain sectors besides enhancing duty drawback rates on specific products.
The government had constituted a committee under Saumitra Chaudhuri, member, Planning Commission, for formulation of rates of duty drawback in view of the decision to bring the DEPB scheme to an end by September 30. The drawback rates shall be capped at 5.5% for many items. There are 340 items where, even after reduction of the ad-hoc rates (1% to 3%) from the existing DEPB rates, the recomputed rate works out to more than 5.5%.
