Duty Entitlement Pass Book(DEPB) Scheme: 1.

DEPB Scheme was first introduced on 1st of April 1997 under EXIM Policy 1997-

2002. It is an export promotion scheme and envisages grant of DEPB Credit Entitlement to an exporter at the time of export at an ad-valorem rate notified by DGFT, in relation to FOB value of the export product. The DGFT have so far notified DEPB rates for nearly 2000 export products. These rates are based on the computation of Basic Customs Duty suffered by the exporters on the inputs listed in the Standard Input-Output Norms (SION) applicable to the export product. The crucial feature of the DEPB Scheme is that all the inputs listed in the Standard Input-Output Norms are deemed to have been imported and to have suffered Customs duties. DEPB rates are finalised by the DEPB Committee, chaired by Additional DGFT and consists of representative from Ministry of Finance also. Value caps have been imposed on export products having DEPB rates of 15% or more to curb the tendency of unscrupulous exporters to avail most of the runaway benefits by over-invoicing export. 2. The normal validity period of a DEPB Scrip is 12 months and DGFT authority

(who issues the scrip) is empowered to grant revalidation. These scrips are for a certain amount of DEPB credit and can be utilised for adjusting Customs Duties (Basic or CVD) against import of any products into India, without the necessity of any co-relation between the export product and the import goods, i.e. it is not necessary to import only the relevant inputs corresponding to the export product. 3. Since DEPB Scheme also involves technicalities like DFRC Scheme, its operation

has also been restricted to limited ports, airports, ICDs, etc. which are notified for the purpose. Commissioners of Customs have, however, been empowered to permit import/export under the scheme from any other place which has not been notified, on case to case basis. The DEPB and/or the items imported against it are freely transferable. Import against DEPB scrips is allowed at the port specified in the DEPB which is the port from where exports have been made. Imports from a port other than the port of export are also allowed under TRA (Telegraphic Release Advice) facility as per the terms and conditions of the notification issued by Department of Revenue.

35 and 2. and the value cap is Rs.4. shall be with reference to the FOB value of exports. in cases where CVD is paid in cash on imported inputs. or where indigenous duty paid inputs. The DEPB rate and the value cap shall be applicable as existing on the date of order of ³let export´ by the Customs. Manufactured and /or exported by any of the units situated in Free Trade Zones/Export Processing Zone/Special Economic Zones/EHTP Scheme. Manufactured partly or wholly in a warehouse under Section 65 of the Customs Act. 1962 (52 of 1962). d. provided CENVAT Credit in respect of such duty incidence is not availed. 4. 3. unless the goods have been manufactured or processed or on which similar operations have been carried out in India.4.per piece.300/-. in such cases brand rate of duty drawback is admissible as per circular issued by the Ministry of Finance. c. if the FOB value is Rs. not specified in SION. 2. No duty drawback is allowed on exports made under DEPB Scheme. are used in the manufacture of export product.300/. the DEPB rate shall be applied on Rs. Manufacture and/or exported by a unit licenced as 100% Export Oriented Unit in terms of the provisions of the relevant Foreign Trade Policy. b.34/97-cus.97) GENERAL INSTRUCTIONS FOR DEPB RATES 1.36 of the Foreign Trade Policy.500/. f. The value cap. However. . Exports of goods of foreign origin. the items shall not be covered under any generic description of the DEPB rate list. Manufacture and/or exported in discharge of export obligation against an Advance Autorisation including Advance Authorisation for Annual Requirement or exported under DFIA Scheme of the relevant Foreign Trade Policy. wherever existing. Wherever any specific rate exists for a particular item under DEPB rate list as given in this book. dated 7.per piece. The rates of DEPB specified in book shall not be applicable to export of a commodity of product if such commodity or product is:a.. (Reference: Customs notification No. Exports made under paragraph 2. For example. The DEPB rates shall be applied on the FOB value or value cap whichever is lower. e.

20 dated 31st July. 2000. 240. as given in this book refer to normally tradable/exportable product. 7. components of writing instruments and watches are thus not eligible for benefit under the DEPB scheme. 6. Items such as Gold Nibs. though covered under the generic description of writing instructions.5. the DEPB entitlement would be restricted to the lowest of the rate applicable to the constituent items. Gold watches etc. The DEPB rate aims to neutralize the incidence of duty on the inputs used in the export product. no DEPB benefit would be admissible on the exportof such product.No. In such cases.243 and 286 of Product Group: Engineering (Product Code 61) exported in the form of incomplete CKD/SKD Kit. 11. the DEPB rates. ignoring the rate of the constituent item(s) having weight less than 5% of the total net weight of such product. The DEPB rate for formulation consisting of more than one bulk drug would be calculated as per provisions of Policy Circular No.241. Description of the composite product including the assembled product. alongwith its total net weight.242. The DEPB rates given for various galvanized Engineering product shall cover non galvanised products and vice-a-versa. Description of all the constitute item(s) of such products which attract a DEPB rate with their respective DEPB Nos. but consisting of (i) Engine (ii) Chassis (iii) Gear Box (iv) Transmission Assembly system (v) Axle (Front & Rear) and (vi) Suspension System or Body/Cab or both. Therefore. 10. Description and combined total weight of those constituent item(s) which have no DEPB rate in the schedule. However. The exporters shall declare in the shipping bill the following details also for claiming DEPB benefit on the export of such product: i.239. The DEPB rate given for various types of garments do not cover Silk as well as Woolen garments unless specifically mentioned in the DEPB description. Gold Pen. 9. if constituent item(s) is weighing more than 5% of the total net weight (of the product) and does not have any DEPB rate fixed. 8. and their credit rate alongwith total weight of such constituent (s). the CKD/SKD export of such product shall also be allowed under DEPB. Wherever the export of resultant product in completely built form is allowed under DEPB. DEPB benefit would also be admissible on the export of composite product including assembled product having more than one constituent items for which DEPB rates are individually fixed. ii. Portable product at S. shall be treated at par with complete CKD/SKD Kit for the purpose of relevant DEPB benefits. iii. .

In such cases. 12. DEPB benefit would be available on the export of products having extraneous material up to 5% by weight.(Explanatory Note) : In case (iii) above is more than 5% of total weight given in (i). . no DEPB on the composite product would be admissible. extraneous material upto 5% shall be ignored and the DEPB rate as notified for that export product shall be allowed.

700/.500/. the exporter is given a duty entitlement Pass Book Scheme at a pre-determined credit on the FOB value. which is issued after exports. You can file one or more application subject to the condition that each application shall contain not more than 10 shipping bills. Under the post-export DEPB. in cash or by demand draft drawn in favor of regional licensing authority/DGFT as applicable. components of writing instruments and watches are thus not eligible for benefit under the DEPB scheme.f. Items such as Gold Nibs. Application Fee You have to pay the fee of Duty Entitlement Pass Book (DEPB) at the rate of Rs 5/. The DEPB Rates are applied on the basis of FOB value or value cap whichever is lower. though covered under the generic description of writing instruments.per . 1/4/2000.per thousand subject to minimum of Rs 200/-. theDEPB Scheme consisted of (a) Post-export DEPB and (b) Preexport DEPB.e. and the value cap is Rs. Application for the grant of credit under Duty Entitlement Pass Book (DEPB) on post export basis may be made to the licensing authority concerned in ANF-4G along with the documents. All the shipping bills in any of the application must related to export made from same port (custom house) only. Duty Entitlement Pass Book Scheme in short DEPB is an export incentive scheme. which will be port from where the exports have been affected. if the FOB value is Rs. Gold Pen. Notified on 1/4/1997.Registration for Duty Entitlement Pass Book DEPB Scheme How to Apply: You can apply for this only when you received the payment. The pre-export DEPB scheme was abolished w. The DEPB rates is allows import of any items except the items which are otherwise restricted for imports. For example. The application for obtaining credit should be field within a period of 6 months from the date of realization of export proceeds. The Duty Entitlement Pass Book (DEPB) shall be issued with single port of registration. Gold watches etc.per piece.

Benefits of DEPB Rates The benefit of DEPB schemes is available on the export products having extraneous material up to 5% by weight. 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. 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.5 of the Exim Policy evenexcise duty paid in cash on inputs used in the manufacture of export product shall be eligible for brand rate of duty drawback as per rules framed by Department of Revenue which was not mentioned in the earlier DEPB Scheme. DEPB Scheme is issued only on post-export basis and pre/export DEPB Scheme has been discontinued. Caps fixed on certain items but there would be no verification of Present Market Value (PMV) on such items. 200 million for fixing new DEPB rates removed.3. Such data and information is usually obtained from the concerned Export Promotion Councils.piece.1). In such cases.3 and 4. The provisions of DEPB Scheme are mentioned in Para 4. The threshold limit of Rs.3. One significant change in the new DEPB Scheme is that in terms of Para 4. as per SION.3. The DEPB rate and the value cap shall be applicable as existing on the date of exports as defined in paragraph 15.1 to 4. Provisional DEPB Rate .15 of Handbook (Vol.5 of the Foreign Trade Policy or Exim Policy. extraneous material up to 5% shall be ignored and the DEPB rate as notified for that export product is be allowed. includingDEPB. A number of ports have been added for availing facilities under the Duty Exemption Scheme. the DEPB rate shall be applied on Rs.500/-.

Bhiwadi. Maintenance of Record It is necessary for Custom House at ports to maintain a separate record of details of exports made underDEPB Schemes. Dighi (Pune). Sea Ports: Mumbai. Port of Registration The exports/imports made from the specified ports given shall be entitled for DEPB. Cochin. Cochin. Surat. Nautanva ( Sonauli). However. Kakinada. Bhubaneshwar Mumbai. . Karur. Surat (Magdalla). Paradeep. Jaipur. The exports made to the following Special Economic Zones (SEZ) are also entitled to DEPB. Srinagar. Jaipur. Kanpur. Pondicherry . Coimbatore. Moradabad. Guntur. Vadodara.Garhi-Harsaru. Madurai and the land Customs station at Ranaghat Mallanpur. Sikka. Meerut Nagpur. Petrapole and Mahadipur. Mundra. Daulatabad. Ludhiana. Jodhpur. Bangalore. Bhilwara. Chennai. (Wanjarwadi and Maliwada). Dahej. Raxaul . Kandla. Tuticorin Vishakhapatnam. Gauhati (Amingaon). Varanasi. Pipavav. Delhi. Bangalore. Faridabad.The main objective behind the provisional DEPB rates is to encourage diversification and to promote export of new products. LCS: Ranaghat. Bhatinda. Ahmedabad. Pimpri (Pune). Nhavasheva. Mangalore. Rudrapur (Nainital). Jogbani. 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. Hyderabad. Waluj. Chheharata (Amritsar). Nagapattinam. ICDs : Agra. Dharamtar and Jamnagar. Singhabad . Kolkata. Varanasi. Hyderabad. Airports: Ahmedabad. Tirupur. Pitampur (Indore). Salem Singanalur. Kolkata Coimbatore Air Cargo Complex. Jallandhar. Nagpur and Chennai. Marmagoa. Nasik. Trivandrum. Dappar. Miraj and Rewari. Kota. Delhi. Okha . Udaipur.

Review: .

at a press conference here today.f. Under the post-export DEPB. This is provided by way of grant of duty credit against the export product at specified rates. 1/4/2000. The pre-export DEPB scheme was abolished w. ********* . the exporter is given a duty entitlement Pass Book at a pre-determined credit on the FOB value. The DEPB Scheme which was notified on 1/4/1997 consisted of (a) Postexport DEPB and (b) Pre-export DEPB. TRA facility extended to all notified ports under DEPB scheme. Under the scheme the following important changes/improvements have been made: y y y y y Provision made for claiming DEPB against advance payment. Validity of DEPB extended upto the last day of the month in which the same is expiring. Coverage of additional ports under DEPB. Rationalisation of DEPB rates in line with changes in Customs duty on account of union budget.e. DEPB means Duty Entitlement Pass Book to neutralise the incidence of basic and special customs duty on the import content of export product.Press Releases DEPB SCHEME CONTINUES Date : 31 Mar 2001 Location : New Delhi The Duty Entitlement Pass Book (DEPB) Scheme has been continued in the Export-Import (Exim) Policy for the year 2001-2002 which was announced by Shri Murasoli Maran. The DEPB allows import of any items except the items which are otherwise restricted for imports. Union Minister of Commerce & Industry. which is issued after exports.

This will just about make up for the crash in DEPB premium from 110% to 95%. Drought and the cold wave may reduce the market surplus resulting in another round in the sorry affairs of the garlic trade. Goods in transit will suffer sever losses. The stiff tariff brings the landed value to Rs 40 per kg which is above the domestic price of Rs 36 per kg. The State Government Cooperative Marketing Societies too entered the fray and started selling import rights to traders.032% on a 30% basic duty item to 5. According to the DGCIS. import is well over Rs 100 crore. The Customs must now return the Rs 1. from 22 April µ02 when the exemption was withdrawn by the 45/2002 notification. In the name of protecting the garlic farmer. Power generating units must cater to the SEZ and not build capacities for DTA market. The US anti-dumping duty of 385% on Chinese fresh garlic on 1 January 1995 resulted in a shift in import composition to dehydrated garlic even though the day variety is difficult to sell to the final consumer due to poor cosmetic appearance. This year. Kolkata. Over one lakh DEPB licences must be opened again for the supplementary claim. 34. after considering the 16% countervailing additional duty.1 % on a 10% item. The department of revenue raised the customs duty to the maximum WTO bound rate of 100% on 15 January. The land of the dragon accounts for 65% of world trade and 45% of world production. DGFT has tightened the screws on the EOUs saying that an email id and website are necessary conditions for duty-free import and sale into DTA facilities. The farmers were not able to deliver garlic in sufficient quantity to the market.The combination of new faces at the top in the finance and commerce ministry has worked. the domestic price of Rs 36 per kg is far ahead of the landed import price of Rs 26 per kg. Almost all the shipments were from China. SEZs and EOUs: The Export Promotion Council for EOUs and SEZ Units has been notified in the Handbook of Procedures with its office at 20/34 East Patel Nagar. DGFT officers are burning midnight oil to revise the DEPB rate schedule covering nearly 2. Exporters must now file supplementary claims. The SAdd incidence varies from 6.62 crore entered the country last year.200 tonnes of garlic valued at Rs 73. they hope that the DGFT and customs officers will rise to the task and develop special software packages to retrieve the closed files. However.000 product groups. EOUs and SEZ units must now register with the new body to work under the government policies. The government has kept its promise to insulate exports from the effect of Customs and Excise.000 crore or so Special Additional Duty collected on the DEPB account in the current year to the exporter. The question is. In India too one can expect pressure on the customs appraiser to accept bills of entry for dried garlic which is subject to only 30% duty on a low price base. Our calculations show a DEPB rate hike of 3% on a 30% basic duty item whose final product is eligible to 15% DEPB after one-third value addition over raw material cost. The sorry state of the garlic trade may yield another crisis on the lines of the onion problem in 1998. The licensing restriction served little purpose. The access of polyester yarn based units to the DTA for job work or sale through the third party exports route has been severely limited. What is more. even advance licence imports were subjected to the ³prior import before export´ condition. The commerce ministry has streamlined the interface between the SEZ and the DTA (Domestic Tariff Area) for sensitive products. Official import will come to a grinding halt for the moment. The finance ministry has given the nod on the subject. We understand that the department of revenue has agreed to the restoration of the 4% Special Additional Duty (SAdd) exemption on DEPB scheme exports. that is. The formal notification on the subject is under issue from the DGFT. just two days before the DGFT notification. after accounting for the maximum 30% duty. . the garlic story is not over. The final impact on consumer prices will depend on the size of the winter garlic crop due in the market soon. Surplus power sale into the DTA will require approval from the SEB and also attract a duty of customs on clearances based on a future Department of Revenue notification. Restrictions have returned in the form of 100% tariff. who took the ill-advised step to withdraw the exemption without revising the DEPB rate? Garlic Politics: The DGFT moved swifly on 17 January to open the import of fresh garlic and shift the item from the restricted list to free list. the measure will be enforced with retrospective effect. New Delhi 110 008..

the marble of Rajasthan is fighting hard to stop the barrage of imports through licensing restrictions. Both granite and marble provide a lasting smooth surface to monuments. on the other hand. mausoleums and building fronts. Academy of Business Studies .The processed granite segment of the EOUs is holding a granite monument Stone Fair in 25 acres of land at the Chennai Trade Fair from 23 to 26 January. Over 100 buyers are expected. This event will be followed up by a marble stone fair at Jaipur on 31 January. The latest is that marble is among the 101 items named by the European Communities in a dispute with India on remaining QRs in a 23 December 2002 request for consultations at WTO. World markets prefer granite but the Indian consumer loves the white marble of the Taj Mahal. Granite industry of the South is young and bubbling with energy from exports.

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