The Chamber of Small Industry Associations (COSIA) has requested the Centre to extend the the Duty Entitled Pass Book (DEPB), a tax refund scheme for exporters, by another three years. The renewal of the DEPB was absolutely essential to meet the export target, M R Khambete, President of the city- headquartered COSIA, said in a release here.
The demand has been forwarded to the Centre, he said.
The scheme, under which exporters get refund of duties on import content of their export products, ends this month and the Government has indicated that it will be withdrawn.
Amongst other incentives, DEPB scheme is most beneficial to boost exports, Khambete said. “The proposed withdrawal is a matter of concern for exporters, particularly those in the Micro, Small and Medium Enterprises (MSMEs).”
The Government has fixed an export target of USD 500 billion within the next three years. Continuation of the scheme, at least for the next three years, will help achieve the ambitious target, he added.
The difference between the FTP of 2004-9 and2009-14 is the lack of consistency in the 2009-14 FTP. Just because the target of US $ 225 billion was surpassed in 2010-11, and touched $ 246 billion, the conclusion drawn by the Finance Minister that sunset has passed in the export front is an erroneous impression, not attested by facts. The subvention in interest (Pre-shipment, Post shipment), PC in Foreign Currency, helped the MSEs to post a genrous return. The Chapter III Schemes of FTP, espiecally Focus Market Scheme, helped Indian export to divert to new risky markets, where market Push played an important role. Just seeing one Year’s performance and taking it as a benchmark for growth is an imprudent way to come to drastic conclusions. Already the domestic market is dithering in pain with supply side constraints, most of which has been due to human error- the outlook of government on major problems manifesting in the Country. DEPB, Government says gobbles Rs 8000 Cr annually to the exchequer. When 2 G scam projected a loss of Rs 1.75 lakh Crore, the very same government did not bat an eyelid. Economic growth, export performance is one thing, loss of Crores of Rupees due to indiscretion is another thing.