GOVERNMENT OF INDIA
MINISTRY OF COMMERCE
DIRECTORATE GENERAL OF FOREIGN TRADE
POLICY CIRCULAR. No. 39 (RE-99)/99-2000
Dated: 22.10.99
To
ALL LICENSING AUTHORITY
ALL COMMISSIONERS OF CUSTOMS
Sub: Calculation of DEPB Credit for Formulations consisting of more than one Bulk Drug.
Attention is invited to DEPB rate given in S.No.37, 37A ,38,39 and 40 of product group chemicals as given in Appendix-28A of Handbook (VOL.1).
At present, the DEPB rate for formulations are available in Serial number 37, 37A, 38, 39 and 40 of chemical product. If the formulations covered under the entries are made of bulk drug, it is eligible for a DEPB rate equivalent to 75% of the bulk drug rate. However, if the formulation is made of two or more bulk drug, the DEPB rate will be 75% of the mean average of the DEPB rate of the constituent bulk drugs. In respect of formulation of non – specified bulk drug, the rate for formulation is available in Serial number 40.
The problem is confronted in cases where one of the bulk drug of the formulation has a DEPB rate whereas the other constituent bulk drug is not having any rate. The issue of calculation of DEPB rate in respect of formulations consisting of more than one bulk drug was raised in various Open Houses. It has therefore been decided to issue a clarification on the manner in which the DEPB rate is to be calculated. In such cases, the DEPB rate for such formulation may be determined by taking the 75% of the notified bulk drug rate of one constituent and taking into account the non notified constituent eligible for DEPB rate against Serial Number 40, and thereafter, work out a mean of the two to arrive at the appropriate rate.
The above formula can be explained by the following illustration:
i Tablets of bulk drugs having 20% – 75% of 20% =15%
DEPB rate (computed at the rate
of 75% of bulk drug rate)
(ii) Tablets of non notified bulk drug – 19%
(as prescribed under Serial number 40)
(iii) The average mean – 15%+19% =17%2
Therefore, in this case, DEPB rate for Tablets shall be 17%. However, the above formula shall be applicable only in cases where the non specified bulk drug constitute not less than 20% of the composition by weight.
In cases where the tablet consist of different bulk drugs and share of a particular bulk drug is less than 20% by weight, the calculation of DEPB rate shall be made as under:
i. Tablets of bulk drugs having 20% – 75% of 20% =15%
DEPB rate (computed at the rate
of 75% of bulk drug rate)
ii. Tablets of non notified bulk drug – 19%
constituting more than 20% by weight
(as prescribed under Serial number 40)
iii. Tablets of non notified bulk drug – 0%
constituting less than 20% by weight
(iv) The average mean – 15%+19%+0% =11.33% = 11%.
3
Similarly, the rate for formulations such as injections, syrup, oral suspension, capsules, intravenous infusions may be calculated as for tablets.
This issues with the approval of DGFT.
(A.K. Srivastava)
Dy.Director General of Foreign Trade
(F.No.01/94/180/163/AM99/Pol.IV)
