Debit from DEPB for Imports under EPCG - Revenue ignores Commerce promise
As per para 4.3.1 of the Annual Supplement 2008 of the Foreign Trade Policy 2004-09, DEPB scrips can also be utilised for payment of duty against imports under EPCG scheme with effect from 01.01.2009. The Policy may say anything, but it has meaning only when the Revenue Department issues notifications to make the Policy workable. For example, when the Commerce Minister announced that the EPCG duty is being reduced from 5% to 3%, it could be put into effect only after the Revenue Department issued Notification No.64/2008 dated 09.05.2008. Now, if an importer, assuming there has been so much stimulus in the economy, and anyway the policy states that from 01.01.2009 EPCG duty can be paid from DEPB credit, tries to do so at any Customs Station, it will simply be not allowed. The Customs will ask for the Notification. Sadly, there is no such notification.
In these times of deep financial crisis, many importers will have to pay cash instead of utilising their DEPB, which would cause them irreparable fiscal damage.
The Board has been doing so much of good work in the recent past, and we hope they will continue the good work in this new year - to start with, may be they should immediately amend Notification No.64/2008 to provide for debit from DEPB.
Perhaps, the trade associations should also keep track of these deadly datelines and remind the Board well in advance.