DEPB scheme ends today

The 14-year-old Duty Entitlement Pass Book (DEPB), the popular tax refund scheme for exporters, came to an end today.

A revised Duty Drawback will replace DEPB, which has been a popular scheme among exporters of engineering, automobile and chemical products, from tomorrow.

Under DEPB, the government's annual spending was about Rs 8,500 crore for reimbursing exporters.

The DEPB had helped exporters by partly offsetting import duty on raw materials for export items and even those using domestic inputs were allowed to avail this benefit, making it popular among the exporting community.

Its attractive rates and flexibility also made the scheme a widely liked one.

"Definitely, DEPB helped engineering exporters a lot. The duty drawback is more or less the same," Engineering Exporters Promotion Council (EEPC) Chairman Aman Chadha said.

He, however, said transaction cost, other expenses and time lag won't be there in duty draw back and many members of EEPC expressed their disappointment over ending of the DEPB.

The Finance Ministry has worked out a compromise between the DEPB and Duty Drawback.

Exports of 1,100 items have now been entitled to lower tax refunds from tomorrow, under Duty Drawback Scheme (DDS).

Since tax incentives for these goods will now be available under the DDS, the total number of items under the DDS would increase to about 4,000 from present 2,835.

Though exports have shown a remarkable performance, growing by 54.2% between April-August 2011, to USD 134.5 billion, there are concerns that the momentum may not be sustained in the wake of increasing economic problems in the US and Europe.