The popular Duty Entitlement Passbook (DEPB) scheme, providing incentive to exporters, is all set to get another extension with the Finance Ministry reportedly agreeing go grant the last reprieve on the condition that a new scheme would be put in place soon.
According to Commerce Ministry officials, the Finance Ministry has agreed to grant extension to the DEPB scheme.
However, there is no clarity on the period for which the scheme will be extended but corridors of power are agog with reports of a three-month extension. “The Finance Ministry has agreed to extend the scheme on the condition that this would be the last extension and a new scheme would be worked out to replace DEPB by that period,'' a senior official said.
The Finance Ministry has made it clear that it would not grant any more extensions to DEPB and that the exporters should be prepared to switch to a new scheme to be unveiled during this extension period. This extension period was being granted to ensure smooth transaction to the new scheme and allow exporters time to work out their business modalities accordingly, officials said. A three-member panel, which includes finance and commerce secretaries will work out the modalities of migration for the exporters to switch to the duty drawback scheme.
Commerce and Industry Minister Anand Sharma had met Fiannace Minister Pranab Mukherjee early this week and urged him to extend to DEPB scheme. Under the scheme, exporters receive duty free entitlements, which they can use to pay import duties. The entitlements are based on the value of goods exported and can be traded freely. The government fixes the rate of the incentive. They are also allowed to claim credit for the excise duty they pay on these domestic inputs.
The scheme cost the Exchequer Rs.8,520 crore in 2010-11, more than 60 per cent of which was cornered by large engineering and chemical exporters. An expert panel headed by Planning Commission member Saumitra Choudhury will work out the duty drawback rates for all export products including those covered under DEPB now.