EXPORTERS are counting on fresh representations by leading corporate houses to retain the popular Duty Entitlement Pass Book (DEPB) scheme, despite the Finance Ministry making it clear that it is not in favour of extending the scheme beyond June 30.
Finance Ministry estimates suggest that the DEPB drains about Rs 8,000 crore every year. The scheme neutralises the impact of basic and special Customs duties on the import content of exports. With the grant of duty credit against the export product under DEPB, exporters end up saving around 8-10 per cent on the cost of their exports.
Since it overcompensates exporters, the Finance Ministry feels DEPB is not WTO-compliant. It has asked exporters to fall back on the duty drawback facility, which does the same neutralisation by compensating for domestic taxes paid.
However, exporters are not too keen on lower duty drawback rates, as they feel that it under-compensates them because several domestic taxes are not considered. Both the Finance Ministry and the Commerce Ministry are of the view that all problems will be sorted out with the launch of the goods and services tax (GST).
But as GST may take a year to be implemented, exporters have once again begun lobbying with the Finance Ministry to extend DEPB. Their efforts have got a shot in the arm after the initiative of the industrial houses, who have taken up the matter with the Finance Minister, Mr Pranab Mukherjee. It is learnt that corporate leaders have made it clear to Mr Mukherjee that discontinuing DEPB would substantially hit
exports.
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