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DEPB for exporters extended; extension beyond Sept ruled out (www.indiareport.com) |
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14/06/2011 |
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New Delhi, Jun 13 (PTI)
Giving relief to exporters, the government today announced extension of a popular tax neutralisation DEPB scheme upto September 30 but ruled out any further continuation of the same.
".We have extended Duty Entitlement Pass Book (DEPB) till September,"Finance Secretary Sunil Mitra told reporters here.
He said an official committee will decide as to what extent the exporters can be compensated as they shift from DEPB to an alternate Duty Drawback scheme.
Under the 14 year old DEPB scheme, the government spends annually about Rs 8,500 crore re-imbursing exporters on the taxes paid on import equivalent content of export products.
The government will save about Rs 4,000 crore after the scheme comes to an end.
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 per cent of the funds under the DEPB goes to exporters in the chemical and engineering sectors.
Ruling out any further room, Commerce Secretary Rahul Khullar said the sun has set on the scheme and"to dream about its extension is not correct".
Khullar also made it clear that exporters cannot take it for granted that they would get the same rate under the alternate Duty Drawback. The exporters can neither be assured of full compensation for the loss.
"There is no talk about making the rates equal (in Duty Drawback), neither there is talk of complete coverage (for compensation),"he said adding that exporters should forget about continuation of 8 per cent reimbursement of export value of consignments, as is given under the DEPB.
He said the scheme has been extended for three months for a smooth transition for exporters to claim the tax neutralisation.
Khullar asked exporters to give their feedback and justify their demand for new drawback rates.
"Those who will get lower rates under Duty Drawback, they should come and tell us why we will give higher rates to them,"he added.
Rates as also coverage under the Duty Drawback is much less than the DEPB.
Meanwhile industry chamber CII welcomed the extra time given to exporters in the backdrop of rising production costs.
Exports are doing well even in the face of global uncertainties. During April-May 2011-12, India's exports increased by 45.3 per cent to USD 49.8 billion in value terms.
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