Standing committee urges introduction of DEPB like scheme for exporters

The Parliamentary Standing Committee on Commerce has urged department of commerce to introduce export promotion schemes like the popular Duty Entitlement Passbook (DEPB) scheme, which was discontinued in 2011.

 

The committee has said “small scale industries are the worst affected” due to discontinuation of the DEPB scheme, which was not compatible with global trading norms under the World Trade Organization (WTO).

 

However, the committee has said that while “introduction of a similar scheme may not be WTO compatible” the ministry of commerce and industry can still devise a scheme for promoting exports without violating norms.

 

“Exporters had been facing major loses ever since the government withdrew the DEPB (Duty Entitlement Passbook Scheme) and replaced it with duty drawback rates. Exporters are losing almost two% of their export value,” said Sanjay Budhia, chairman of CII’s National Committee on Exports and Imports and managing director of Kolkata-based Patton Group.

 

Under DEPB, which was discontinued with effect from October 1, 2011, exporters were compensated for the customs duty they paid on their shipments. Some of the worst affected sectors were engineering sector, including auto and auto component industry, chemicals, pharma, textiles and the marine sectors.

 

The 14-year old DEPB scheme was extremely popular among exporters covering nearly 52% of the exports. It was replaced by the duty drawback scheme, which reimburses the customs duty component, covers between 15-20% of the exports.