Introduction
Duty Entitlement Passbook Scheme (DEPB) is an export incentive scheme implemented by the Indian Government to the exporters of the country. The scheme refunds duties that are paid by the exporters in the form of credit. This scheme came into force on 01.04.1997, had both pre-export and post-export DEPB of which, the latter was abolished on 01.04.2000. This article describes the features of the scheme.
The benefit of the DEPB scheme shall be available on the exported products that are having an extraneous material up to 5% by weight. In such cases, the extraneous material that is up to 5% shall be ignored and the actual DEPB rate for the export product will be considered.
Under the DEPB scheme, an exporter of the commodities is empowered to demand credit which can be an already settled percentage of the value of the commodities that are exported and are available at a rate of exported good which is determined and notified by the Director General of Foreign Trade (DGFT).
It must be kept in mind that the credit amount which is made available to the exporters can only be utilized to pay off the amount of customs duty which is liable to be paid and the same cannot be utilized to adjust it with any other liability nor can it be withdrawn. Although, there is no restriction on trading the amount, i.e., it can be transferred to another person and then can thereafter be transferred to another person from him.
| Credit under DEPB and Present Market Value : |
| In respect of products where rate of credit entitlement under DEPB Scheme comes to 10% or more, amount of credit against each such export product shall not exceed 50% of Present Market Value (PMV) of export product. During export, exporter shall declare on shipping bill that benefit under DEPB Scheme would not exceed 50% of PMV of export product. |
| However PMV declaration shall not be applicable for products for which value cap exists irrespective of DEPB rate of product. |
| Review of DEPB Rates : |
| The Government of India review the DEPB rates after getting the appropriate a export import data on FOB value of exports and CIF value of inputs used in the export product, as per SION. Such data and information is usually obtained from the concerned Export Promotion Councils. |
| Implementation of the DEPB Rates : |
| Some additional facilities as listed below have been provided for better implementation of the DEPB Rates :DEPB rates rationalized to account for the changes in Customs duties.Caps fixed on certain items but there would be no verification of Present Market Value (PMV) on such items.A number of ports have been added for availing facilities under the Duty Exemption Scheme, including DEPB.The threshold limit of Rs. 200 million for fixing new DEPB rates removed. |
| Provisional DEPB Rate : |
| The main objective behind the provisional DEPB rates is to encourage diversification and to promote export of new products. However, provisional DEPB rates would be valid for a limited period of time during which exporter would furnish data on export and import for regular fixation of rates. |
| Maintenance of Record : |
| It is necessary for Custom House at ports to maintain a separate record of details of exports made under DEPB Schemes. |
Re-export of imported goods under the DEPB scheme
Under the Export Import (EXIM) guidelines of the Government of India (Department of Revenue), the defective imported commodities that are unfit to utilize and ultimately have to be returned back
shall be exported back once again to the concerned person.
In such cases, 98% of the credited amount will be debited against the DEPB for the export of commodities.
The Commissioner of Customs who is the concerned authority will then furnish a certificate pertaining to this which would mention the total amount that is generated and the complete details of the original DEPB and ultimately the new DEPB is then furnished by the Directorate General of Foreign Trade (DGFT) regional authority that is authorised to do so.
The furnished DEPB certificate must have the same port of registration and must be valid for a specific period of time which is identical to the balance period which is available on the date of import of the defective commodities which are unfit to use.
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