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New duty drawback rate may be lower

12 Sep 2011 Evaluate

The Finance Ministry can fix a rate of up to 3 per cent lower for the new duty drawback scheme that will replace the Duty Entitlement Pass book (DEPB) scheme from October 1. Currently corporates get DEPB benefit on an average rate of 9 per cent. On the other hand, average duty drawback rates when the Cenvat facility is used are 13-14 per cent.


Despite this, DEPB is considered more attractive as the exporters get duty-free scrips or entitlements based on the value of goods exported to pay for import duties. Although the assumption is that all the inputs have been imported, exporters are allowed to use up to 50 per cent domestic inputs.

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