DEPB scheme likely to be replaced in Exim policy

NEW DELHI, MAR 18: The commerce ministry is considering a new scheme for allowing duty-free inputs for export production. Discussions are on between the commerce ministry and the finance ministry to take a final view on the introduction of the scheme in the revised export-import policy 1997-2002 to be notified by commerce minister Ramakrishna Hegde on March 31. The new scheme is likely to replace the duty entitlement passbook scheme DEPB which has been in vogue for the past two years.

The DEPB scheme which replaced the old Passbook scheme for select exporters was modified last year by neutralising the 5 per cent special customs duty in the DEPB rates. So far, DEPB rates or more than 2,000 items have been notified by the director-general of foreign trade DGFT. These rates are applicable to all the export items for which input-output and value addition norms have been prescribed.

The objective of the DEPB scheme is to offset the incidence of basic customs duty on the import content of export products.The neutralisation shall be provided by way of grant of duty credit against such export products. The duty credit under the scheme shall be calculated by taking into account the deemed import content of export products as per standard input-output norms.

The value addition achieved by export products shall also be taken into account while determining the rate of duty credit under the scheme. Under the scheme, an exporter shall be eligible to claim credit as a percentage of fob value of exports made in freely convertible currency.