DEPB scheme to continue for another three months

The Prime Minister's Office has directed the finance ministry to extend the Duty Entitlement Passbook Scheme by another three months, until December 31, 2005.

The finance ministry's notification on DEPB expired on September 30, 2005.

Commerce and Industry Minister Kamal Nath had sought the extension of the scheme by another six months to enable exporters to continue with the existing scheme this fiscal year.

The DEPB, is a popular scheme covering 52 per cent of the country's merchandise exports.

The new scheme to replace the scheme was recently cleared by the committee of secretaries. It had asked the commerce and industry ministry to ensure that the revenue foregone under the new scheme did not in any financial year cross Rs 10,000 crore.

The National Council of Applied Economic Research (NCAER) had recommended the new scheme to cover three duties - the electricity duty burden, petrol and high-speed diesel cost used in the captive power plants, and the inter-state duty paid as Central Sales tax.

The DEPB is a reimbursement of basic and special Customs duty paid by an exporter on an imported input used in the export product. The benefit is given by way of a grant of duty credit against the export product at specified rates.