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Export Benefits Analysis

02 September 2008

Dear Experts,
I want to clear my doubts on the below topics:
1. Which export scheme should a company choose?
2. What is the difference between Duty Drawback on Exports, DEPB on
exports, Excise Duty refund on exports?
3. Can someone pls guide as to what analysis one should do before
choosing a particular export benefit scheme.

Amit.

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3 Replies

CA Annie (Chartered Accountant ) (747 Points)
Replied 03 September 2008

Duty Drawback Scheme
Under this scheme, exporter of goods is allowed to take back refund of money to compensate him for excise duty paid on the inputs used in the products exported by him. It neutralizes the duty impact in the goods exported. In comparison to DEPB, this is the refund of money to exporter and is not an instrument which can be transferred to anybody

DEPB (Duty Entitlement Pass Book) Scheme is an export incentive scheme provided in Import and Export policy. The objective of the scheme is to neutralize the incidence of basic custom duty on the import content of the exported products. Under the scheme, an exporter is eligible to claim credit as a specified percentage of value of exported product and is available at a rate of exported product as may be determined by Director General of Foreign Trade (DGFT). The credit amount in DEPB only entitles you to adjust that amount for payment of customs duty and is not permitted to be withdrawn or adjusted in some other manner. There is no bar for transfer of this credit to another person and from him to another person ie this credit amount is freely tradable.

Amit Dhanurdhari (Service) (53 Points)
Replied 03 September 2008

Originally posted by :Annie
"	Duty Drawback Scheme Under this scheme, exporter of goods is allowed to take back refund of money to compensate him for excise duty paid on the inputs used in the products exported by him. It neutralizes the duty impact in the goods exported. In comparison to DEPB, this is the refund of money to exporter and is not an instrument which can be transferred to anybody DEPB (Duty Entitlement Pass Book) Scheme is an export incentive scheme provided in Import and Export policy. The objective of the scheme is to neutralize the incidence of basic custom duty on the import content of the exported products. Under the scheme, an exporter is eligible to claim credit as a specified percentage of value of exported product and is available at a rate of exported product as may be determined by Director General of Foreign Trade (DGFT). The credit amount in DEPB only entitles you to adjust that amount for payment of customs duty and is not permitted to be withdrawn or adjusted in some other manner. There is no bar for transfer of this credit to another person and from him to another person ie this credit amount is freely tradable. Amit... Myself too in these two days sought advice from the customs people of my company. I will like to clarify one point here. Excise Duty refund is alwasy allowed unless bond is executed when export is made. While Duty Drawback is alllowed considering the fact that Government has made it so. Governemnt has calculated that the import duty incidence on export product is x %. (Generally it is 1%). Hence Duty drawback too is allowed if your product has a drawback rate prescribed.	"

kalpesh (-) (24 Points)
Replied 04 September 2008

Originally posted by :Annie
"	Duty Drawback Scheme Under this scheme, exporter of goods is allowed to take back refund of money to compensate him for excise duty paid on the inputs used in the products exported by him. It neutralizes the duty impact in the goods exported. In comparison to DEPB, this is the refund of money to exporter and is not an instrument which can be transferred to anybody DEPB (Duty Entitlement Pass Book) Scheme is an export incentive scheme provided in Import and Export policy. The objective of the scheme is to neutralize the incidence of basic custom duty on the import content of the exported products. Under the scheme, an exporter is eligible to claim credit as a specified percentage of value of exported product and is available at a rate of exported product as may be determined by Director General of Foreign Trade (DGFT). The credit amount in DEPB only entitles you to adjust that amount for payment of customs duty and is not permitted to be withdrawn or adjusted in some other manner. There is no bar for transfer of this credit to another person and from him to another person ie this credit amount is freely tradable.	"