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Duty Entitlement Passbook (DEPB) scheme: Meaning and objective

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.

The Duty Entitlement Passbook (DEPB) scheme, launched on April 17, 1997, was an export incentive scheme that helped Indian exporters by refunding duties paid in the form of credit, which reduced manufacturing costs.

Note: The DEPB scheme was deprecated in 2011 and its provisions were incorporated into the Duty Drawback scheme. This blog provides general information about the DEPB scheme.

What is Duty Entitlement Passbook (DEPB) scheme?

To support Indian exporters, the Government of India launched various fiscal incentives, reducing taxes on input products to lower manufacturing costs. The Duty Entitlement Passbook (DEPB) scheme was one such scheme that allowed exporters to claim credits based on a set percentage of the Free on Board (FOB) value of their exports, determined by the FOB value and the value cap of the product, whichever was lower. Exporters could avail benefits on most import items, excluding restricted goods like gold nibs, pens, and watches. The DEPB scheme has since been discontinued and integrated into the Duty Drawback scheme.²

What was the objective behind DEPB scheme?

Some of the key objectives of the DEPB scheme were as follows:

• Neutralize customs duties: The scheme aimed to balance the impact of customs duties on imported inputs used to manufacture export products.
• Promote value addition in exports: It factored in the value addition achieved through exports when determining duty credit rates. Value caps were imposed on products with high DEPB rates to prevent misuse.
• Offer flexibility: Exporters could use credits for importing any items, including restricted ones. DEPB scrips were transferable and could be used to pay duties under the Export Promotion Capital Goods (EPCG) scheme.³

List of ports where DEPB could be availed:

Exports and imports were permitted only through designated ports, as listed below:

● Sea ports: Mumbai, Kolkata, Cochin, Dahej, Kakinada, Kandla, Mangalore, Mormugao, Mundra, Chennai, Nhava Sheva, Paradeep, Pipavav, Sikka, Tuticorin, Visakhapatnam, Surat (Magdalla), Nagapattinam, Okha, Dharamtar, and Jamnagar.
● Airports: Ahmedabad, Bengaluru, Bhubaneshwar, Mumbai, Kolkata, Coimbatore Air Cargo Complex, Cochin, Delhi, Hyderabad, Jaipur, Srinagar, Trivandrum, Varanasi, Nagpur, and Chennai.
● Inland Container Depots (ICDs): Agra, Ahmedabad, Bengaluru, Bhiwadi, Coimbatore, Daulatabad, (Wanjarwadi and Maliwada), Delhi, Dighi (Pune), Faridabad, Guntur, Hyderabad, Jaipur, Jalandhar, Jodhpur, Kanpur, Kota, Ludhiana, Madurai.
● Land Customs Station (LCS): Ranaghat, Singhabad, Raxaul, Jogbani, Nautanva (Sonauli), Petrapole, Mahadipur, Mullanpur, Moradabad, Meerut, Nagpur, Nasik, Guwahati (Amingaon), Pimpri (Pune), Pitampur (Indore), Rudrapur (Nainital), Salem, Singanallur, Surat, Tirupur, Udaipur, Vadodara, Varanasi, Waluj, Bhilwara, Pondicherry, Garhi-Harsaru, Bhatinda, Dappar, Chheharata (Amritsar), Karur, Miraj, and Rewari.
● Special Economic Zones (SEZs): Santacruz, Kandla, Kochi, Visakhapatnam, Chennai, Falta, Surat, and Noida.

Conclusion

The Government of India has implemented a range of schemes to support exporters and drive export growth. While the DEPB scheme has been phased out, there are many other initiatives that are designed to empower businesses to export from India. For rapidly growing sectors like e-commerce exports, the government has announced dedicated policies and initiatives such as the development of e-commerce export hubs to enable streamlined processing of e-commerce export goods. For more assistance with e-commerce exports, Indian exporters can leverage the tools and solutions offered by e-commerce export programs like Amazon Global Selling.

Amazon Global Selling: Easy exports via e-commerce

If you are a business owner and you want to sell your products across the world, Amazon Global Selling enables you to list and sell ‘Made in India’ products on 18+ Amazon global marketplaces. As an e-commerce exports program, Amazon Global Selling provides support and guidance at every step of your exports journey – documents and licenses, logistics, payments, advertising, and more.

Registered sellers can choose to ship their products by themselves through Merchant Fulfilled Network (MFN) or they can opt for Fulfillment by Amazon (FBA) and outsource order fulfilment to Amazon including packing, storage, delivery, and returns. Amazon Global Selling simplifies the process of international shipping, helping businesses navigate customs and reach a vast audience.

Guide to export with Amazon

More blogs on export schemes

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2. Gold Card Scheme for exporters: Objectives, eligibility and benefits

3. How to register for the Market Access Initiative (MAI) scheme?

4. What is the NIRVIK scheme for exporters?

5. All you need to know about Interest Equalisation Scheme and its benefits

6. All you need to know about the Transport and Marketing Assistance Scheme (TMA Scheme)

7. RoSCTL scheme: Benefits, eligibility and application procedure

8. Understanding export incentives in India: What are the benefits for exporters?

9. Advance Authorisation Scheme: How does it help exporters?

10. What is Export Promotion Capital Goods Scheme (EPCG)?

11. What is Duty Drawback in export: Meaning, types and process

12. Understanding the benefits of RoDTEP scheme: A guide for Indian exporters

13. What is Authorized Economic Operator (AEO) Programme: How to register and obtain AEO certificate?

Frequently Asked Questions

What is the difference between DEPB and EPCG schemes?

Duty Entitlement Passbook Scheme (DEPB) allowed exporters to apply for credit as a fixed percentage of the FOB value of each product exported. On the other hand, Export Promotion Capital Goods (EPCG) scheme enables manufacturer exporters to import capital goods at concessional duty rates specifically to produce export goods, with an obligation to export a certain amount to avail the benefit.

Is DEPB abolished?

The DEPB scheme comprised two parts, the pre-export DEPB which was abolished on April 1, 2000, and the post-export DEPB which was phased out on September 30, 2011.

What is the difference between DEPB & DFRC Scheme?

The main difference between these schemes is that Duty Entitlement Passbook (DEPB) scheme allows exporters to claim duty credit against the customs duty paid on imported inputs used in their export products, while the Duty Free Replenishment Certificate (DFRC) scheme permits duty-free import of specific inputs used in the manufacture of export goods^.5

What are provisional DEBP rates?

Provisional DEPB rates were designed to encourage product diversification and promote the export of new items. These rates were valid for a limited time, and exporters had to provide data on their exports and imports to regularly update the rates.⁶

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.indiafilings.com/learn/depb

3.https://cag.gov.in/uploads/download_audit_report/2014/Union_Performance_Dept_Revenue_Indirect_Taxes_DEPB_Scheme_9_2014_chapter_5.pdf

4. https://www.indiafilings.com/learn/depb

5. https://www.exim-policy.com/duty_exemption_remission_scheme.html/

6. https://imd.gujarat.gov.in/policy-highlights-of-exim-policy

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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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