Exporters to SEZs will get duty sops

The new customs regulations are likely to come into effect from next month

With the commerce and revenue departments burying their differences, exporters can now expect to claim duty entitlement passbook (DEPB) scheme benefits for supplies made to units in special economic zones as part of the comprehensive customs rules. The new regulations are likely to come into effect from next month.

At a meeting between Commerce Secretary Dipak Chatterjee and Revenue Secretary Vineeta Rai on Wednesday, it was decided that exporters in the domestic tariff area could claim DEPB benefits from May 1 for exports made to SEZs, officials told Business Standard.

They added that the revenue department had agreed to delegate powers to customs officials below the rank of commissioners as a measure to help SEZ units avoid any delays. The department had earlier proposed to give the powers only to customs commissioners.

The customs rules, which were to come into effect from August last year, had been delayed repeatedly because of differences between the revenue and commerce departments.

While the commerce department had sought the delegation of all powers to the Development Commissioner or CEO of the SEZs, the revenue department was in favour of retaining some of the fiscal powers. Officials said the draft rules would now be prepared by the revenue department over the next few days and then discussed with the commerce department.

Earlier, the commerce department was of the opinion that the revenue department did not incorporate the decisions that had already been taken. The commerce department also complained that the new rules could turn out to be more restrictive than the existing ones.

The revenue department was citing instances of exporters using loopholes in the various export promotion schemes operated by the commerce department.

However, following the Cabinet clearance to the draft SEZ Bill, North Block softened its stance. Officials, however, said the delay in notifying the rules has not affected the development of new SEZs since most of the proposed zones are yet to achieve financial closure.

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End of a tussle

• Exporters in domestic tariff area can claim DEPB benefits for exports made to SEZs from May 1
• Revenue department has agreed to delegate powers to customs officials below the rank of commissioners
• The new customs rules have been delayed because of differences between the revenue and commerce departments