THE Duty Entitlement Passbook (DEPB), the popular-export incentive scheme, has got a three-month extension from the Finance Ministry. It was to end on June 30.
However, the Ministry has made it clear that exporters should brace themselves to switch to the duty drawback scheme by October as it would not grant any further extensions to DEPB.
According to a source, by permitting exporters to enjoy the benefits offered by DEPB for three more months, the government wants to ensure a smooth transition to the new scheme.
The source apprised that a three-member panel, comprising Secretaries from the Commerce and Finance ministries, would work out the modalities of migration to the duty drawback scheme.
Last week, the Finance Minister, Mr Pranab Mukherjee and Commerce Minister, Mr Anand Sharma met and discussed the issue and decided to extend the scheme.
It is a known fact that the Finance Ministry is firm on ending DEPB, contending that it allows exporters double benefit instead of just neutralising the import duty on inputs that go into exports.
In 2010-11, the scheme cost the exchequer Rs 8,520 crore, of which more than 60 per cent was exploited by large engineering and chemical exporters.
In contrast, the drawback scheme just neutralises levies paid on inputs. The rates are fixed annually, based on the changes in the duty structure in the Budget.
In this direction, an expert panel headed by Planning Commission member Mr Saumitra Choudhury will evaluate the duty drawback rates for all export products, including those covered under DEPB now.
Besides, the Finance Ministry has also asked the Commerce Ministry to direct export promotion councils to provide relevant data to the panel. The industry is not against the DEPB phase-out, as long as a substitute scheme is in place.
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