DEPB may get a fresh lease of life
The much-delayed alternative scheme to the Duty Entitlement Pass Book (DEPB) scheme is gradually turning into a stillborn child.
By G Ganapathy Subramaniam and MK Venu, TNN |
NEW DELHI: The much-delayed alternative scheme to the Duty Entitlement Pass Book (DEPB) scheme is gradually turning into a stillborn child. The idea of reimbursing duties imposed by state governments has been rejected by the law ministry.
The only way to do so is through a Constitutional amendment, the commerce & industry ministry has been informed. The immediate impact of the move could be another lease of life to the existing DEPB scheme.
Commerce & industry minister Kamal Nath has said that the DEPB facility will not go till an alternate window is available to enable exporters to access duty-free inputs.
The only way to do so is through a Constitutional amendment, the commerce & industry ministry has been informed. The immediate impact of the move could be another lease of life to the existing DEPB scheme.
Commerce & industry minister Kamal Nath has said that the DEPB facility will not go till an alternate window is available to enable exporters to access duty-free inputs.
Officials are finding that it is virtually impossible to convince state governments to bear the additional expenditure that may arise. This avenue was explored since this was the only way such reimbursements could be made without having to go through a constitutional amendment.
The plan to source resources for the new DEPB scheme from the divisible pool of taxes has also not been accepted, sources said. Officials feel that a number of state governments would oppose this idea since the impact of the move on their share from the divisible pool would not be commensurate with benefits exporters of these states might get. That leaves the new scheme, which is under discussion for a year now, in the doldrums. As of now, there seems to be no way of reviving the DEPB alternative.
The commerce & industry ministry is trying explore new avenues and is insisting that the existing DEPB scheme continue till the new one is formulated, sources added. Discussions with the finance department are on and it may not be possible to meet the March ���06 deadline for formulating an alternative.
Highly-popular among exporters, the DEPB scheme was put on notice following opposition to it from the finance ministry and the perception that it is not compatible with norms laid down by the World Trade Organisation (WTO). Exporters have been fighting to protect it, insisting that even developed countries like the US are doling out subsidies which are not WTO-compatible scheme.
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