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What is Duty Entitlement Passbook (DEPB) Scheme for exporters?

The Duty Entitlement Passbook (DEPB) Scheme is an export incentive scheme that allows a refund of duties paid by exporters on importing input materials. Learn more about the scheme and how to avail its benefits in this blog.
depb scheme
To foster the growth of Indian trade and to support exporter community, the Government of India has launched various fiscal incentives and schemes. These incentive schemes benefit exporters by offering a range of financial and non-financial incentives. Under these schemes, the government collects fewer taxes on input products used in the making of export products, thereby cutting down manufacturing cost. One such scheme is the Duty Entitlement Passbook Scheme (DEPB), which was notified on April 17th, 19971.

What is Duty Entitlement Passbook Scheme?

The Duty Entitlement Passbook Scheme (DEPB) is an export incentive scheme issued by the Government of India where exporters can avail the scheme at a pre-determined credit on the FOB value. The duties are refunded in the form of a credit against exported products as a specified percentage of the Free on Board (FOB) value of those products. An exporter can claim DEPS at a pre-determined FOB value. These rates depend on the basis of FOB value and the value cap of the product, whichever is lower. The benefit of DEPB can be availed on all import items except restricted goods like gold nibs, gold pens, gold watches, etc2.

Did you know?

Valuation cap or value cap is a value of a product that is fully convertible into currency or stock ownership in future.

What is the objective behind DEPB scheme?

The key objective of the DEPB scheme is to balance the impact of customs duties imposed on importing products, which in turn are used for the export products. The duty credit is granted as a part of DEPB scheme against the products exported.

There are some additional implementations in the DEPB rates like fixing of value caps for certain items and addition of the number of ports for availing the Duty Entitlement Passbook Scheme. Following is the list of ports where DEPB can be availed3:
Sea ports: Mumbai, Kolkata, Cochin, Dahej, Kakinada, Kandla, Mangalore, Mormugao, Mundra, Chennai, Nhava Sheva, Paradeep, Pipavav, Sikka, Tuticorin Vishakhapatnam, Surat (Magdalla), Nagapattinam, Okha, Dharamtar and Jamnagar.

Airports: Ahmedabad, Bangalore, Bhubaneshwar Mumbai, Kolkata Coimbatore Air Cargo Complex, Cochin, Delhi, Hyderabad, Jaipur, Srinagar, Trivandrum, Varanasi, Nagpur and Chennai.

ICDs : Agra, Ahmedabad, Bangalore, Bhiwadi, Coimbatore, Daulatabad, (Wanjarwadi and Maliwada), Delhi, Dighi (Pune), Faridabad, Guntur, Hyderabad, Jaipur, Jallandhar, Jodhpur, Kanpur, Kota, Ludhiana, Madurai and the land Customs station at Ranaghat Mallanpur, Moradabad, Meerut Nagpur, Nasik, Gauhati (Amingaon), Pimpri (Pune), Pitampur (Indore), Rudrapur (Nainital), Salem Singanalur, Surat, Tirupur, Udaipur, Vadodara, Varanasi, Waluj, Bhilwara, Pondicherry, Garhi-Harsaru, Bhatinda, Dappar, Chheharata (Amritsar), Karur, Miraj and Rewari.

LCS: Ranaghat, Singhabad, Raxaul, Jogbani, Nautanva (Sonauli), Petrapole and Mahadipur.

SEZ: Santacruz, Kandla, Kochi, Vishakhapatnam, Chennai, Falta, Surat, Noida.
Export incentive schemes like DEPB can benefit your export business in the long run. The Government of India has introduced many such schemes and incentives to assist exporters and accelerate export growth from India. With e-commerce exports programs, Indian exporters can grow their businesses and take their local products across the world with ease .

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Frequently Asked Questions

What is the difference between DEPB and EPCG schemes?
Duty Entitlement Passbook Scheme (DEPB) is a government scheme with which an exporter may apply for credit as a fixed percentage of the FOB value of each product exported. Whereas, Export Promotion Capital Goods (EPCG) scheme enables manufacturer exporters to import machines and other goods that will be utilized for the production of export products.
Is DEPB abolished?
The DEPB scheme is comprised of two parts: 1. Post-export DEPB and 2. Pre-export DEPB. The pre-export DEPB was abolished on April 1st, 2000.
What is the difference between DEPB & DFRC Scheme?
Duty-Free Replenishment Certificate is issued to merchant exporters and manufacturer exporters for importing inputs used in making export products without paying basic customs duty and additional duties4.
Published on July 21, 2022.

Sources:
1. https://www.cag.gov.in/uploads/download_audit_report/2014/Union_Performance_Dept_Revenue_Indirect_Taxes_DEPB_Scheme_9_2014_chapter_5.pdf
2. https://www.dgft.org/depb-rates.html
3. https://en.wikipedia.org/wiki/Duty_Entitlement_Pass_Book#:~:text=The%20DEPB%20Rates%20are%20applied,shall%20be%20applied%20on%20Rs.
4. http://www.effective-business-letters.com/duty-free-replenishment-certificate.html
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*Map not to scale. The map has been used for design and representational purpose only, it does not depict the geographical boundaries of the country. These do not conform to the external boundaries of India recognized by the Survey of India.

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