Govt extends DEPB scheme till September

The government on Monday said it has extended the popular exports scheme - DEPB - for three more months till September. The DEPB scheme was due to end on June 30.

"We have extended Duty Entitlement Pass Book (DEPB) till September," Finance Secretary Sunil Mitra told reporters at the sidelines of a seminar organised by Ministry of Finance and OECD.

However he said that the scheme will be phased out and replaced by duty drawback. "It (DEPB) will be phased out (and) duty drawback will take its place. We have appointed a committee which we think will take a couple of months to decide all India drawback rates for items currently under DEPB," Mitra said.

Exporters can also ask for brand rate fixation, he added. The Indian government spends annually about Rs 8,000 crore (Rs 80 billion) reimbursing exporters on the taxes paid on import content of export products.

Under the scheme, exporters are given refunds of tax incidence on the import content of their export products.

The 14-year old scheme is the most popular among exporters, especially in the engineering including automobiles sector. India's exports went up by 37.55 per cent year-on-year to $ 245.86 billion during 2010-11.

Image: Sunil Mitra, Finance Secretary