Govt extends DEPB scheme for three more months till September 2011

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The government today said it had extended the popular exports scheme – DEPB – for three more months till September.

The DEPB scheme was due to end on June 30.

“…We have extended Duty Entitlement Pass Book (DEPB) till September,” Finance Secretary Sunil Mitra said on the sidelines of a seminar organised by Ministry of Finance and OECD.

However, he said scheme would be phased out and replaced by duty drawback.

“It [DEPB] will be phased out [and] duty drawback will take its place. We have appointed a committee which we think will take a couple of months to decide all India drawback rates for items currently under DEPB,” Mitra said.

Exporters can also ask for brand rate fixation, he added.

The Indian government spends about Rs 8,000 crore annually, reimbursing exporters on the taxes paid on import content of export products.

Under the scheme, exporters are given refunds of tax incidence on the import content of their export products. The 14-year old scheme is the most popular among exporters, especially in the engineering including automobiles sector.

India’s exports went up by 37.55% year-on-year to $245.86 billion during 2010-11.