The government today extended the tax incentive scheme for exporters, Duty Entitlement Pass Book (DEPB), till September 30, a step which will benefit the exports sector.
"The DEPB scheme gets an extension of three months from June 30, 2011 to September 30, 2011," the Directorate General of Foreign Trade said.
Under the 14-year-old DEPB scheme, the government spends annually about Rs 8,500 crore for re-reimbursing exporters on the taxes paid on import equivalent content of export products.
As the scheme was set to close on June 30, exporters were agitated and lobbying hard with both Finance and Commerce ministries for its extension.
A lion's share of about 60% of the funds under the DEPB goes to exporters in the chemical and engineering sectors.
Both the Ministry of Finance and Ministry of Commerce and Industry have said that the scheme would not get any further extension after September.
The government plans to replace the DEPB by an alternate Duty Drawback scheme.
Commerce Secretary Rahul Khullar had said DEPB was being extended so that there could be smooth transit to Duty Drawback scheme.
During April-May 2011-12, India's exports increased by 45.3% to $49.8 billion in value terms.