Remission Scheme, DEPB Scheme

Remission scheme includes:

(i) Duty Drawback Scheme

Various schemes like EOU, SEZ, DEEC, manufacture under bond, etc., are available to obtain inputs without payment of customs duty/excise duty or obtain refund of duty paid on inputs. In case of Central Excise, manufacturers can avail Cenvat credit of duty paid on inputs and utilize the same for payment of duty on other goods sold in India, or they can obtain refund. Schemes like manufacture under bond are also available for customs. Manufacturers or processors who are unable to avail any of these schemes can avail ‘duty drawback’.

(ii) Duty Entitlement Passbook Scheme

The Duty Entitlement Passbook Scheme (DEPB) is devised for those exporters who wish to avail the facility of importing various inputs and other approved items under DEPB scheme on post-export basis. As such, this scheme operates in a procedure exactly opposite to that of Advance Authorization Scheme, which allows imports prior to exports.

DEPB Scheme

DEPB (Duty Entitlement Pass Book) is an export incentive scheme of Indian Government provided to Exporters in India.

Duty Entitlement Pass Book Scheme (DEPB) is an export incentive scheme. The objective of DEPB is to neutralize the incidence of Customs duty on the import content of the export product. The neutralization shall be provided by way of grant of duty credit against the export product. Under the DEPB, an exporter may apply for credit, as a specified percentage of FOB value of exports made in freely convertible currency.

Notified on 1/4/1997, the DEPB Scheme consisted of (a) Post-export DEPB and (b) Pre-export DEPB. The pre-export DEPB scheme was abolished w.e.f. 1/4/2000. Under the post-export DEPB, which is issued after exports, the exporter is given a duty entitlement Pass Book Scheme at a pre-determined credit on the FOB value. The DEPB rates allows import of any items except the items which are otherwise restricted for imports. Items such as Gold Nibs, Gold Pen, Gold watches etc. though covered under the generic description of writing instruments, components of writing instruments and watches are thus not eligible for benefit under the DEPB scheme.

Benefits of DEPB Rates

The benefit of DEPB schemes is available on the export products having extraneous material up to 5% by weight. In such cases, extraneous material up to 5% shall be ignored and the DEPB rate as notified for that export product is be allowed.

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, as per SION. Such data and information is usually obtained from the concerned Export Promotion Councils.

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.

Caps fixed on certain items but there would be no verification of Present Market Value (PMV) on such items.

A number of ports have been added for availing facilities under the Duty Exemption Scheme, including DEPB.

The threshold limit of Rs. 200 million for fixing new DEPB rates removed.

Provisional DEPB Rate

The main objective behind the provisional DEPB rates is to encourage diversification and to promote export of new products. However, 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.

Maintenance of Record

It is necessary for Custom House at ports to maintain a separate record of details of exports made under DEPB Schemes.