Textile exporters peeved over DEPB rate cut

The reduction in DEPB rates by nearly 45 per cent for all the textiles products will jeopardize exports, according to the Cotton Textiles Export Promotion Council (Texprocil).

The Union commerce minister has announced the reduction in rates last evening. The association of the cotton exporters said in a press release that it was "shocked" with the deep cut which would disrupt the execution of orders, which were negotiated by the exporters. The current DEPB rates have been taken into account by the exporters while entering into contract with the importers.

Texprocil chairman B K Patodia said the announcement of the reduction came when deadlines for shipments for the Christmas season were being met by the exporters as. He pointed out that the reduction in rates was totally unjustified as there has been no change in the Custom Duty applicable to the cotton textile sector.

Patodia has urged the Center to reconsider the sharp reductions and restore the rates of cotton textile products to their original levels till the finalisation of an alternative scheme which was envisaged in the new foreign trade policy.

The DEPB scheme is meant to neutralize the basic Customs Duty suffered on the inputs consumed. There is no justification for the reduction in rates and as the custom duties remain unchanged.

The reduction in rates is totally contrary to the principles on which the DEPB scheme has been formulated, he alleged. The government has justified the cut on the ground that the excise duty relief has been granted to the cotton textile sector in the last budget.

Patodia said although the relief granted has brought a lot of cheer to the textile industry, the excise duty was not related to the concept of DEPB scheme.