India to end DEPB incentives for exporters on 30 June
18 May 2011
The government has decided not to extend the Duty Entitlement Pass Book scheme (DEPB), which ends on 30 June, as the tax incentive scheme tended to reward exporters at a huge revenue loss to the government.
The DEPB scheme caused an annual revenue loss of Rs8,000 crore ($1.78 billion) to the government, revenue secretary Sunil Mitra said today.
This means that the government reimburses about $1.8 billion every year to exporters on taxes paid on imported supplies.
Mitra said the export sector in the country is doing well and can do without the DEPB scheme as exports from the country need no incentives as of now.
However, industry body Confederation of Indian Industry (CII) thinks otherwise. Any abrupt withdrawal of an incentive scheme would adversely affect export prospects of concerned industries, CII warned on Monday.
A withdrawal of the DEPB scheme will retard the growth momentum achieved by exporters in the past few years, according to CII.
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