DEPB to continue for another year
Like the proverbial cats with nine lives, the Duty Entitlement Pass Book (DEPB) scheme has defied the axe once again.
By TNN |
NEW DELHI: Like the proverbial cats with nine lives, the Duty Entitlement Pass Book (DEPB) scheme has defied the axe once again. The popular export incentive will continue till May 2009 and the move is likely to provide relief to the exporters who have been hit hard by the rupee appreciation in the last one year.
There would be no replacement of the in the near future, according to indications from the annual supplement of the foreign trade policy (FTP) on Friday. Several moves to replace the scheme over the past years have proved futile.
While the usual practice is to extend a scheme till March-end, the extra two months have apparently been provided to take care of elections as the government doesn���t want any uncertainty at that time. Extension of the DEPB scheme would be without any changes in the implementation process.
It is likely that the scheme would continue till the implementation of a uniform goods and services tax (GST). The GST is likely to be put in place by 2010. Some price sensitive products like Basmati rice, steel and cement would, however, not be entitled for the benefits under the scheme. Their exclusion is aimed towards curtailing inflation which has touched a three year high of 7.4% for the week ended March 29.
DEPB is the most popular scheme among the exporters because of the fact that under the scheme traders can import the raw material and equipment at a reduced rate and show the obligatory export latter. The government wants the scheme to be replaced by the duty drawback scheme under which the traders would first pay all the required taxes and get the drawback after showing proof of mandatory exports.
Denting margins of exporters because of sharp appreciation in rupee versus the greenback in the last 12 months coupled with political pressure and ensuing general election next year has led to the continuation of the scheme during the current fiscal.
There would be no replacement of the in the near future, according to indications from the annual supplement of the foreign trade policy (FTP) on Friday. Several moves to replace the scheme over the past years have proved futile.
While the usual practice is to extend a scheme till March-end, the extra two months have apparently been provided to take care of elections as the government doesn���t want any uncertainty at that time. Extension of the DEPB scheme would be without any changes in the implementation process.
It is likely that the scheme would continue till the implementation of a uniform goods and services tax (GST). The GST is likely to be put in place by 2010. Some price sensitive products like Basmati rice, steel and cement would, however, not be entitled for the benefits under the scheme. Their exclusion is aimed towards curtailing inflation which has touched a three year high of 7.4% for the week ended March 29.
DEPB is the most popular scheme among the exporters because of the fact that under the scheme traders can import the raw material and equipment at a reduced rate and show the obligatory export latter. The government wants the scheme to be replaced by the duty drawback scheme under which the traders would first pay all the required taxes and get the drawback after showing proof of mandatory exports.
Denting margins of exporters because of sharp appreciation in rupee versus the greenback in the last 12 months coupled with political pressure and ensuing general election next year has led to the continuation of the scheme during the current fiscal.
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