The government today said it had extended the popular exports scheme – DEPB – for three more months till September.
The DEPB scheme was due to end on June 30.
“…We have extended Duty Entitlement Pass Book (DEPB) till September,” Finance Secretary Sunil Mitra said on the sidelines of a seminar organised by Ministry of Finance and OECD.
However, he said scheme would be phased out and replaced by duty drawback.
“It [DEPB] will be phased out [and] duty drawback will take its place. We have appointed a committee which we think will take a couple of months to decide all India drawback rates for items currently under DEPB,” Mitra said.
Exporters can also ask for brand rate fixation, he added.
The Indian government spends about Rs 8,000 crore annually, reimbursing exporters on the taxes paid on import content of export products.
Under the scheme, exporters are given refunds of tax incidence on the import content of their export products. The 14-year old scheme is the most popular among exporters, especially in the engineering including automobiles sector.
India’s exports went up by 37.55% year-on-year to $245.86 billion during 2010-11.
With the Department of Revenue seeing reason in their judgement to extend by another three months, the DEPB Scheme, the exporetrs can sigh relief. DEPB before it is abolished should be factored in DDB in such a way that the taxes paid by the exporter to import goods, or the Central excise levy clamped, which add to the cost of production which makes Indian products to engage in market push difficult. Indian export fraternity have been alone in their attempt in the rough and thick developed markets of the world with their wares. The greatest drawback in assessing global markets was not competition but obstacles from the Govt of India, which did nothing to bring down the transaction costs, no fiscal advantage on a long term in the annual budgets, uneven provisioning of funds for infrastructure, and giving more emphasis to social schemes. If there is an objective, and if it is attained, it is right. But the money earmarked for poor remains where they are, the poor still in darkness. Our Government’s mindset is the mindset of the 1950s. The Country has moved forward. But our Ministers are still in 1950! The pace of a bullock cart.