DEPB Extended for Three Months
IT'S now official. The DEPB Scheme has been extended. This was announced by the Revenue Secretary last week, the DGFT on Friday issued a Public Notice amending the Handbook of Procedures (vol I) to officially declare the extension.
Para 1.1 of the HBP(vI) reads as,
In pursuance of the provisions of paragraph 2.4 of FTP, the Director General of Foreign Trade (DGFT) hereby notifies the compilations known as HBPv1, HBPv2 and Schedule of DEPB rates. These compilations, as amended from time to time, shall remain in force until 31st March 2014, except DEPB scheme, which shall continue to be operative till 30th June 2011.
Now till 30th June 2011 it is amended to read as till 30th September 2011
The same para 1.1 of the HBP as on 27.08.2009 read as,
In pursuance of the provisions of paragraph 2.4 of FTP, the Director General of Foreign Trade (DGFT) hereby notifies the compilations known as HBPv1, HBPv2 and Schedule of DEPB rates. These compilations, as amended from time to time, shall remain in force until 31st March 2014, except DEPB scheme, which shall continue to be operative till 31st December 2010 or till a replacement scheme is announced, whichever is earlier.
The 2010 HBP did not contain anything about a replacement scheme. However, it seems the Government is working on a replacement scheme and most probably, it will get merged with the drawback scheme. In any case, Government is serious that the DEPB scheme should end by 30th September 2011.
DEPB was introduced in the Exim Policy 1997-2002 with effect from 1.4.1997, as an export promotion scheme to allow credit as a specified percentage of FOB value of exports. As with any scheme, the DEPB was marred by intensive litigation, confusion, clarification and fraud. Nearly a thousand cases, more than a hundred circulars and tons of audit objections, notwithstanding, the scheme was very popular with the trade. Even in the very first year of its existence, CAG raised objections about the rates of DEPB.
Come September and it seems to be a final ADIEU to DEPB
DGFT Public Notice No. 54/(RE-2010) /2009-2014, Dated: June 17, 2011