Govt may extend DEPB scheme for three more months

The government is likely to extend the popular tax benefit scheme for exporters, Duty Entitlement Pass Book (DEPB), for three months till September, sources said.

The DEPB scheme was due to end on June 30, but exporters are lobbying hard with the Commerce Ministry which is pursuing their case with the Finance Ministry.

With the country's exports registering an impressive growth of 37.55% in 2010-11, the Finance Ministry was not in favour of any more extensions to the tax rebate scheme - Duty Entitlement Pass Book (DEPB).

According to industry sources, the government has agreed to extend the scheme by three months. But it could not be confirmed either from the Commerce Ministry or Finance Ministry.

The Indian government spends annually about Rs 8,000 crore re-imbursing exporters 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% year-on-year to $245.86 billion during 2010-11.