DEPB RATES RAISED – PACKAGE TO HELP SUSTAIN EXPORT GROWTH MOMENTUM, SAYS KAMAL NATH
Date : 13 Jul 2007
Location : New Delhi
Shri Kamal Nath, Minister of Commerce & Industry, has announced an export package comprising of enhanced DEPB rates to help Indian exporters who had recently suffered due to a rising rupee. Shri Kamal Nath stated that the new DEPB rates are expected to help sustain the export growth built upon the strength of a booming economy. He expressed hope that the package would neutralize the adverse impact of rising rupee on exports which have been built upon the success of Indian economy achieved through export earnings in recent years.
In addition to the reduction in export realisation due to the rupee appreciation, it had been pointed out by the industry that several state taxes / levies i.e., electricity duty, sales tax on petroleum products and CST are presently not rebated. It was also pointed out that due to the rupee appreciation, the value addition prescribed in the DEPB calculation has in fact gone down, which would necessitate upward revision in the DEPB rates. Similarly, the value caps stipulated for various products for DEPB were stated to be unrealistic.
Shri Kamal Nath apprised the Prime Minister on this issue and government also held several rounds of discussions. After a series of such wider consultations including export organisations like FIEO and Export Promotion Councils recently, the Minister today informed that the government has announced an export package.
The package includes the following:
® DEPB rates have been enhanced by 3% for 9 sectors i.e., textiles (including handloom), readymade garments, leather products, handicrafts, engineering products, processed agricultural products, marine products, sports goods and toys.
® For the rest of the items, DEPB rates have been enhanced by 2%.
® ECGC premium has been reduced by 10% of the existing premium rates.
® To clear all arrears of terminal excise duties and CST reimbursement, an amount of around Rs.600 crore has been released.
® The rates of duty drawback has been enhanced by around 10 to 40% of the existing rates.
® The rate of interest on pre and post-shipment credit has been reduced by 2%.
The matter regarding notification of exemption /refund of service tax for exports, as was announced in the Foreign Trade Policy 2007, is still under consideration.