The Duty Entitlement Passbook Scheme has been “extended” to December 31. There is nothing material here since DEPB was expected to run through the tenure of the 2004-2009 Exim Policy which ends on December 31. RBI giving Rs 5,000 crore line of credit to Exim Bank is a minor positive.
Under the DEPB scheme, companies get refund of customs duty paid on imported raw material for manufacturing products that are to be exported. A Sakthivel, chairman of the Federation of Indian Export Organisations, said exporters have been seeking a 3% increase in duty drawback and 2% in interest subvention. Nothing on this came about.
“Now look at what China did: it increased VAT refund from 9% to 17% with effect from January 1, the third time it has done in the last four months despite no increase in import duties on inputs. This will have a negative impact on Indian manufacturers of leather, handicraft, textiles, knitwear, gem and jewellery,” he said.
Source : Daily News & Analysis