DEPB review leaves exporters of spices

MUMBAI: The government has reviewed the Duty Entitlement Pass Book scheme through public notices Nos 62 & 63 dated February 17, ''03. The government seems to have finally realised that trade had suffered losses because of the withdrawal of Special Additional Duties benefits to exports made in April ''02.
Apparently, there seems to be an injustice done to the food industry as revised/increased DEPB rates have been announced except for food items, which is the only DEPB benefit available to and used by exporters, says Yogesh Mehta, president, Indian Spice and Foodstuff Exporters Association.
One wonders whether it is due to oversight that the food industry has been left out, adds Mr Mehta.
To compensate losses when SAD benefits were withdrawn on DEPB of exports made in April ''02, the DEPB rates were enhanced to offset the loss of SAD.
While only a few industries have benefited the food industry has been left behind, says Mr Mehta. Exporters expected a hike of minimum 2% on the existing rate plus 2% to benefit/recover the loss of SAD on exports made in April ''02.
"Why this discrimination towards the spices and foodstuff industry ?", asks Mr Mehta. In the case of spices and foodstuffs, DEPB is given only to the packaging material and not the items. But all others items like pharma, garment, jewellery industry etc, they are eligible for DEPB, he added.
Now, a brief background. In ''01-02, spice exporters who packaged the items in jute bags got 10% on FOB value while those who used plastic bags got 2% of FOB value. And, if they sold the licence in the open market, they got 180% premium and SAD was included then. In ''02-03, SAD was not included and the premium of this licence decreased to 70% and at present it is 80-90%. Exporters who had made calculations on this suffered losses, Mr Mehta said.
Following representations, the government decided to issue supplementary DEPB licences to those whose premium has decreased. They were given time till September ''03 to apply. The government has decided to continue with the DEPB till ''05.
Meanwhile, exporters have made representations to DGFT, Apeda, Spices Board and the commerce ministry on their grievances.
They have demanded that they should also be allowed to apply for any supplementary licence that will be issued. "How can spice exporters be competitive internationally if there are no incentives and even existing benefits are denied to them?", ask exporters.