Government to reward exporters with continuation of duty neutralisation schemes
The amended Exim policy announced by Commerce and Industry Minister Arun Jaitley has retained its thrust on Duty Entitlement Pass Book (DEPB) scheme, even though the policy has reiterated the possibility that DEPB would be merged with drawback schemes.
The Exim policy has also expanded the scope of DEPB to allow provisional rates to encourage diversification of exports, broaden anti-dumping measures and safeguard duty exemption to advance licences for deemed exports and extend Duty Free Replenishment Certificate (DFRC) scheme to deemed exports.
The minister said that due to the good performance of the exports, the government had decided to reward exporters with the continuation of duty neutralisation schemes, but said in future the DEPB and drawback schemes could be merged. Some countries in the past have said that the DEPB rates were not WTO-compliant.
The Exim policy has introduced a facility for provisional DEPB rates to encourage diversification and promote the export of new products. This would help exporters for those products which do not have brand rates. But simultaneously DEPB rates will come down with the general reduction in Customs duty.
The DEPB scheme allows credit to exporters for the duty they pay on imports needed to manufacture their products. Of a total of 2,052 items, value caps have been fixed for 16.03 per cent, or 329 items. An exporter can apply for credit under the scheme as a specified percentage of the free on board (FOB) value of exports, made in freely convertible currency.
The credit shall be available against export products at rates specified by the Director General of Foreign Trade against import of raw materials, intermediates, components, parts, packaging material and others.
Under the Advance licence scheme, standard input-output norms have been notified for 403 new products. Besides anti-dumping and safeguard duty exemption to advance licences for deemed exports meant for supplies to export oriented units, special economic zones, electronic hardware technology parks and software technology parks have also been announced.
The proposal to allow for extension of the Duty Free Replenishment Certificate (DFRC) scheme to deemed exports is expected to provide a boost to domestic manufacturers.
