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DEPB withdrawal will impact exporters
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Bikky Khosla | 24 May, 2011
Even as the issue of ending the Duty Entitlement Pass Book (DEPB) scheme after June 30 gathers heat, the Finance Ministry seems adamant about its move to do away with it. And who will be hit hard? Once again, small exporters will be affected more due to the expiry of the scheme, under which exporters get sops to the extent of 8-9 percent of the value of shipments.
What irks me is the fact that this sudden move will affect the profit margins of exporters tremendously, owing to the fact that they have already done the costings of various international contracts based on the DEPB scheme. This leaves no room for exporters to negotiate with buyers for better costing.
I feel a long-term approach was required before deciding on the withdrawal of the scheme. The scheme could have been continued till the time the Goods and Service Tax (GST) was introduced. In addition, with the withdrawal of the scheme, it seems to be a herculean task to achieve the export target of USD 500 billion by 2014.
The time too for the withdrawal of the DEPB scheme beats all rationale. Exports from the country have just started recovering after years of global economic slowdown and with no DEPB scheme, the sector can land up in a precarious position yet again. On one hand the global economic conditions are still very fragile, while on the other, the interest rate has gone up from 7 percent to 10.25 percent, a 46.43 percent rise in less than a year. So where does the exporter stand? Input costs are rising, bank finance is hard to come by and the government has decided to withdraw the schemes that could have helped them!
I strongly believe that the government needs to take into account these factors before deciding on the issues related to interest subvention of 2 percent and continuation of the DEPB scheme. With the Commerce Minister, Mr Anand Sharma likely to meet the Finance Minister upon his return from the India-Africa Forum Summit, to convince him to continue the DEPB Scheme, letâs just hope that good sense prevails.
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Extension of DEPB
Suresh Kumar | Tue Jun 7 04:20:39 2011
Sir,
the sudden withdrawal of the DEPB Scheme will hurt the export community. I strongly recommend that this scheme should continue till alternative scheme is introduced.
DEPB Scheme
TAPAN KUMAR NAYAK | Wed Jun 1 14:06:24 2011
IT IS SEEN THAT THE EXPORTERS AVAIL BOTH DEPB AND REBATE. REBATE IS NOTHING BUT DRAWBACK. WHEN DRAWBACK IS NOT ALLOWED. HOW CAN THE REBATE BE ALLOWED?
Export Incentives
kalpesh | Wed Jun 1 05:50:29 2011
As a common man i think no need to give any incentives for exports. if compare to other countries system we have to learn from them and to be advance/grow-up coz such a schemes increase government burden.
Keep one structure of Incentives
Surender Sharma | Wed Jun 1 05:02:14 2011
I strongly recommend that incentives should continue till mkt get stable. Minister should see how they are playing withcimmon man and common biz. On all the corners there policies are failed. Minister should look into it that how he is spending money either he has to give money to poor people without working or those poor people who work and then want money. Our handloom industry is facing huge problems like roads, water, electricity, wrong tax structure and many more. Our honourable minister should be deeply concerned on to this and should realize that if he going to help handloom industry i.e.MSMEs it means he is really helping those poor people who are willing to work and supporting our nation to grow.
Our ministares should see around the world as well mainly China who know that only industry can boost up their economy due to which they have extra ordinary infra structure and they have made themself that now they are need of customers from all over the world.
Before I close my comments I would like to finish in short that we are at least 20years late in taking decisions in the groth of our country. Still as we see govt. behaviour, I do not see that our politicians are eligible to think on right path of success.
DEPB WITHDRAWL
ANKIT GUPTA | Wed Jun 1 04:52:15 2011
IT IS A GOOD MOVE AS THIS WILL HELP TO STOP MISUSING THE BENEFITS GIVEN BY GOVERNMENT BY LARGE SCALE UNITS (EXPORTERS).
Ankur | Fri May 27 19:46:30 2011
But there would still be duty drawback schemes under which the exporterss can prevail an average duty drawback of 7-8 percent.Removin DEBP schemes would actually help the government to curb cases wherein the exporters use to extort government money through overinvoicing
DEPB WITHDRAWAL
Sanjay jain Abron exports Ambala | Fri May 27 17:14:45 2011
the withdrawal of DEPB will be a blow to exporter who in the time odd recession are barely managing to earn living for them selves and workers but depening on govt drawbacks to make some profits in this tough time . The interest ls of EPC will be adding to problem who know what the govt wants and take profits to help the poor but how the business people who earn doller will survive
AN OFF-RECORD OPINION ON DEPB WITHDRAWAL
RAJAMANI | Thu May 26 01:59:38 2011
As per the WTO conditions, except Duty Drawback all other schemes should have been abolished long back. But the unscrupulous in the Trade got this scheme extended each year. Under this scheme, the unscrupulous in trade, boost the export value and get incentives in the form of DEPB certificate which is freely usable by anyone. Prior to 2002, DEPB certificates were not on line and all the entries were made manually repeatedly thereby the entire DUTY amount was pocketed by most CHAs who became trillionaires. Still, some more schemes like Star plus etc are not on line leading to manipulations. The DGFT which is highly corrupt than Customs, used to give amendments to the original value without proper accountability.I welcome this move which is done under pressure from WTO I hope. Exporters have adequate Draw back incentives on their exports.
The trade will pour tonne loads of money on commerce ministry/ govt and may not allow the withdrawal.
INTRODUCTION AND WITHDRAWAL OF SCHEMES AND POLICIES
Anilkumar E Pillai | Wed May 25 18:46:28 2011
All that is schemes and policies introduced are curse when withdrawn as cost working of bear minimum competitiveness is based on such cost. These schemes were held long for exporters to believe in its sustainability. Why do the government not pull out subsidiaries given on petrol and diesle. There are such innummerable items on which such subsidiaries should have been removed but they are here to stay else face the worst while its withdrawn. Just to say that the government introduced or withdrew a policy or scheme is just a bunder when the real burden is not know by the masses in the near future but grumble when such schemes or policies are introduced or withdrawn.
DEPB withdrawl
VEENITA | Wed May 25 13:18:10 2011
Sir, I dont find any merits in your arguments. When Drawback scheme is there, where is the need of DEPB. it is a direct subsidy to exports and major export houses and merchant exporters are eating away these incentives in the guise of DEPB. it is a right move, should have been taken earlier.
DEPB SHOULD NOT BE WITHRAWN
SURESH PATEL | Wed May 25 09:19:42 2011
WE STRONGLY OPPOSE TO WITHDRAWN OF DEPB SCHEME. IT MUST BE CONTINUE UPTO APPLICATION OF GST. WITH THIS STEP ALL SMALL EXPORTERS WILL BE BADLY AFFECTED AND EXPORT WILL BE END OF THEM.
DEPB Scheme
Sunil Vaghani | Wed May 25 09:15:31 2011
I totally agree with the editor that more longer term planning needs to be put in effect for SMEs export benefit but saying that, same is happening in China which is meant to be India's main competitor in the region. Government there is also introducing tax on export of some of the product. It seems, all the government are feeling the pinch of economic down turn where profits are hit hard for the businesses so are the tax revenue for the governments and they are trying to see where they can make cuts or collect.
DEPB
Ramesh Nakul | Wed May 25 09:04:14 2011
we are planning for 500 billion USD export which can be achieved if we are competetive.
The disadvantage India has
High interest rates
High cost of electricity
High transportation cost
beauracratic hurdles and time cost
appericiating rupee
In view of above our product are expensive and compromising in quality and not best among the Chinese and other Asian countries.
An amount of Rs. 800 crore is too small an amount for DEPB.It is alleged that DEPB is being misused, the solution does not lie in abolishing the same but in prudence in ditribution and market intellegence to avoid such misuse for the expoter alone is not responsible there must be set of people including liason and officials.It is suggested that we must not only continue the DEPB but include more sectors to continue the growth of export and make the foreign markets dependant on Indian product then alone we can think of aborting the incentives provided in the form of DEPB.
DEPB can withdrawn with alternative scheme
nanu n nair | Wed May 25 08:57:09 2011
Goverment can make some alternative scheme in place DEPB - with half percent of DEPB rates. It will beneficeries all exporters. Accordingly, Exporters can give their revised offer to their customers.
About time ..
lokesh jain | Wed May 25 07:57:47 2011
As a manufacturer , i feel this should have been done long ago . There are hardly any incentives left for the manufacturing sector and the entire burden of the misuse of the scheme is borne by the tax giving sectors . The parity had been in demand and i think these steps are many steps forward to GST. excise tax,sales tax etc are the burdens which accumilate with the paper work required . hopefully all these strong measures will bring parity in every sector and make us capable of not being dependent on incentives.
DEPB Should not be withdrawn
Rajnish | Wed May 25 04:27:16 2011
How can a Government be so partial in making available Sops and relief to the Industrial Community of a Country which is Thriving to become the Developed Country
Our Policy makers should look atleast to the neighbour Countires who are putting RED Carpet for the Exporters and making our industry unviable in the international arena
Unless a New Scheme is in PLACE, govt Should not Abandon the Current one
DEPB Withdrawal may be good
Siddharth Sethia | Wed May 25 02:57:36 2011
Withdrawal of DEPB means less revenue loss by government which is paid by the taxholders money.
Drawback scheme is still on for the exporters.
DFIA scheme is also in the picture which benefits a lot of exporters.
To make our exports competetive DEPB cannot be carried on forever. Our exporters should come out of baby feeding and develop technologies and scale to counter there costs adn not subsidy from the government.
For the long term it is good for the exports of our country, so get out of the comfort zone and start competing.
Exports
Allan Dsouza | Wed May 25 00:59:57 2011
Illuminating n timely thanks
DEPB
Ashoka | Wed May 25 00:38:50 2011
What is DEPB ? How it will affect the exporters?
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Re: DEPB
Darshan Parmar | Thu May 26 01:52:55 2011
I think you have not read the article. Please go through it. It clearly explains it.
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Re:Export incentives
B.srinivasan. | Wed May 25 00:37:32 2011
Any withdrawal of incentives should not be sudden. Proper notice at least one year ahead should be given as generally contracts may last for such periods. The exporters would have already taken into account the expected incentives on the same. Sudden removal erode their profit margin and their competitive pricing in the future. However exporters should not be always hanging on these incentives. The Government can slowly reduce this burden of incentives by making some rules by which the scheme of incentives should be made available for an initial period of not exceeding three years by which time they should try to accelerate their volume/ turnover of exports on the same price. The more the turn over even if unit wise profit margin may be less , the whole profit on their investments etc. will definitely be more.
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Re: Re:Export incentives
Suresh | Wed May 25 07:04:37 2011
I agree with you. We exporters are still struggling to get business and for sudden money for the orders. It is difficult to get money from our banks. So these schemes will really help for the exporters. The government should think once again.
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DEPB
David | Tue May 24 22:48:32 2011
It does not matter which country you come from the governments appear to make it hard for the business to survive. I am from Australia & similar money grabbing ways of Governments
DEPB WITHDRAWAL IS GOOD
Anil Agarwal | Tue May 24 20:57:33 2011
DEPB was meant to be refund of taxes but WE ALL KNOW that the scheme was misused and abused by exporters and this scheme ought to be withdrawn.
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Re: DEPB WITHDRAWAL IS GOOD
Suresh | Wed May 25 07:10:49 2011
You are absolutely wrong. There are laws, few of us are misused the laws. So will you close/ demolish/ withdraw all the laws?
Government should keep an eye on them, and have to punish the people who are misused.
There are people who find it beneficial who desperately need money. So government should think this once again.
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