DEPB scheme extended till May 2009

NUTS & BOLTS

The Duty Entitlement Passbook (DEPB) scheme for exporters has been extended till May 2009.

The scheme, which was to expire on March 31 this year, was extended to the new financial year.

The Cabinet last month withdrew the DEPB benefit from cement, steel, manganese and ferro chrome sectors to improve supplies in the domestic market and control inflation.

Income tax benefit to export units
The income tax benefit for exports from 100 per cent export-oriented units (EoUs) has been extended by a year. The benefit was to end on March 31, 2009.

Various export organisations, including the Federation of Indian Export Organisations (FIEO), had been lobbying for an extension. There are more than 2,300 EoUs in the country.

Export Promotion Council for telecom
An Export Promotion Council will be set up to provide institutional support to exports from the telecom sector.

Commerce Minister Kamal Nath said information technology would be under focus this year and specific items from the sector would be made eligible under the High-Tech Product Export Promotion Scheme. This would enable funding of the sector under schemes like Market Development Assistance and Market Access Initiatives.

More duty credit for toys and sports goods
Toys and sports goods will get an additional duty credit of 5 per cent. This is in addition to the 2.5 per cent duty credit allowed on the freight-on-board price of certain notified products under the Focus Product Scheme.

The sector will also get separate funds for market promotion under Market Development Assistance and Market Access Initiatives schemes.

Relief to sectors hit by rupee appreciation
Interest subvention to sectors hit by the rise in the value of the rupee, and to small and medium enterprises has been extended by a year. The government had last year announced a slew of steps to bail out the rupee-hit sectors.

Exporters were given 2 per cent relief on pre- and post-shipment credit in various sectors.

This year's Foreign Trade Policy reduces the average export obligation under the Export Promotion Capital Goods (EPCG) scheme in sectors where exports declined last year.

Customs duty under EPCG reduced
Customs duty payable under the Export Promotion Capital Goods Scheme (EPCG) scheme has been reduced to 3 per cent from 5 per cent.

Also, all exports under the scheme will be eligible for incentives under various promotional schemes.

Under the scheme, export obligations for big trading houses shall be an average of the last five years' exports instead of the present three years.

Interest to be paid on late refunds
To ensure faster refund of terminal excise duty and central sales tax, 6 per cent interest rate will be paid on refunds that do not take place within a month of the due date.

Now, coloured gem stones will be exported on a consignment basis. Waste or scrap generated during manufacturing in a special economic zone (SEZ) can be freely disposed of in a domestic tariff area (DTA). Surat Hira Bourse has been recognised as a port for jewellery exports.

A joint task force to be set up
A joint task force with representatives of the central government, state governments, panchayati raj institutions, industry and exporters would be set up to prepare a detailed action plan to successfully implement the objectives of the Foreign Trade Policy.