New DEPB scheme benefits SEZ suppliers

08 Apr '06

2 min read

The Foreign Trade Policy announced new benefits under Duty Entitlement Pass Book (DEPB) scheme enhancing profitability of Special Economic Zones' (SEZs) suppliers.

This policy announcement by Finance Minister increases the possibilities of India emerging as an important hub for gems and jewellery business.

Material suppliers receiving payment in Indian rupees will now be entitled for DEPB which will neutralise basic customs duty.

The DEPB scheme incorporates neutralizing incidence of basic customs duty on import content of export product.

This is provided by way of grant of duty credit against export product at specified rates.

They will be eligible for DEPB benefit only if payment is made in foreign currency account of the SEZ unit. This would promote domestic sourcing at competitive pricing.

The passbook is issued after exports are completed. The exporter is given a DEPB pass book at pre-determined credit on FOB value. The DEPB allows import of all items except those restricted for imports.

Policy for gems and jewellery sector allows for export of value-added products, easy product movement across borders and allows import of precious metal scrap for refining.

The Finance Minister P Chidambaram announced setting up an expert body to look into potential and current taxation of this sector.

PROCEDURE FOR CLAIMING/SUBMISSION OF APPLICATION FOR DUTY ENTITLEMENT PASS BOOK SCHEME

Introduction
In terms of para 7.14 of the current Export & Import Policy, the exporters not desirous of going through the licensing route an optional facility is given under DEPB scheme.

The objective of Duty Entitlement Passbook Scheme is to neutralise the incidence of customs duty on the import content of the export product. The neutralisation shall be provided by way of grant of duty credit against the export product.

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