The 14-year old scheme is the most popular among exporters, especially in the engineering including automobiles sector. India's exports went up by 37.55 per cent year-on-year to $ 245.86 billion during 2010-11.
Commerce and Industry Minister Anand Sharma will be meeting Finance Minister Pranab Mukherjee to make a case for the extension of one of the most popular incentives to exporters, the Duty Entitlement Passbook Scheme (DEPB), which is slated for expiry on June 30. DEPB is a duty reimbursement scheme, launched 14 years earlier.
One of the most favoured duty reimbursement schemes among exporters - the Duty Entitlement Passbook (DEPB) scheme - is likely to be scrapped, as the government gears up to introduce the Goods and Services Tax (GST) from April 1.
The finance ministry has turned down a proposal for shifting the exporters' tax refund plan to the commerce ministry, which has been lobbying hard to take charge of the duty entitlement pass book scheme.
After getting periodic extensions, the 14-year-old tax-refund scheme is finally coming to an end in June.
Government should make it clear as to whether the Duty Entitlement Passbook scheme will continue beyond June.
The finance ministry had strongly opposed the hike announced by the commerce ministry.
Enthused by over 20 per cent export growth this year, the Exim policy to be unveiled on March 31 will contain far reaching measures to encourage exports of textiles and gems and jwellery
As a setback to exporters, shipments of 1,100 items will be entitled to lower tax refunds from October 1 when curtains draw on the popular DEPB scheme, government announced on Friday.
Announcing the annual Foreign Trade Policy, Anand Sharma said recovery in global economy so far has been fragile and uneven.
The inflation rate inched closer to 7%. the government has started pulling out all stops to boost domestic supply situation by withdrawing incentives on export of at least 40 items, including steel, cement and non-basmati rice. The Commerce Ministry withdrew or temporarily suspended the tax refund scheme - Duty Entitlement Pass Book. Besides measures to discourage exports, the government is considering more fiscal steps to improve supplies and rein in inflation, he indicated.
Taking yet another measure to check inflation through improving domestic supplies, the government today stopped export incentives on basmati rice. "Export of basmati rice shall not be entitled for DEPB (Duty Entitlement Pass Book) benefits," the Directorate General of Foreign Trade said in a notice. Government has already banned export of non-basmati rice & revised upward the minimum export price for basmati rice. Inflation for the week ended March 22 has touched the 7% mark.
The finance ministry is considering a suggestion by the Commerce Ministry to enhance duty neutralisation rates to make up for revenue lost by exporters due to sharp appreciation in the rupee.
With the rupee expected to continue to appreciate, sops cannot be given endlessly, and exporters will have to learn to hedge their exposures.
With India's exports all set to touch $80 billion in 2004-05, the new Foreign Trade Policy to be unveiled on Friday will have a slew of measures to boost farm exports apart from traditional sectors like textiles, gems and jewellery.
India's share in international trade would cross the target of one per cent much ahead of scheduled 2007, Director General of Foreign Trade Lalit Mansingh said on Friday.
The government on Monday gave a massive thrust to services and exports, removed restrictions on exports and made the EPCG scheme more flexible.
Recent appreciation has not deterred companies like electric goods maker Havells to set up plant in India.
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