Date:11/03/2005 URL: http://www.thehindubusinessline.com/2005/03/11/stories/2005031102990300.htm

Back Ministry exploring alternatives to DEPB scheme

Our Bureau

(from left) Mr Ajay Sahal, acting Director-General, FIEO, Mr K.T. Chacko, Director-General of Foreign Trade, Mr P.G. R. Sindhia, Karnataka Industries Minister, and Mr Walter D'Souza, Convenor, Committee on Agro Exports and AEZ, FIEO, at an open house meet on foreign trade policy in Bangalore on Thursday. - G.R.N. Somashekar

Bangalore , March 10

THE Commerce Ministry expects to get inputs by the end of March for its proposal for an equally exporter-friendly `successor instrument' to the DEPB scheme.

The Ministry has been exploring a new, WTO-compliant tool of remission that will take into account unrebated tax incidences at various levels, according to the Director-General of Foreign Trade, Mr K.T. Chacko.

The Ministry had entrusted the National Council for Applied Economic Research and the Economic Law Group under the Finance Ministry to generate the inputs. The report is to be made available in the last week of March but it may take another six months to study and implement any suitable alternative.

Speaking at an open house on this year's foreign trade policy, organised by the Karnataka chapter of the Federation of Indian Export Organisations, Mr Chacko said at present, the cost of various export transactions could amount to 18-22 per cent of the f.o.b. because of considerations such as octroi, CST and inter-State levies, issues such as use of indigenous raw materials, and post-April, also VAT.

There was a strongly felt need for a durable mode that retained the elements of the DEPB and that would enable exporters to get the benefit of 10-12 per cent of unrebated taxes, Mr Chacko said.

The Ministry is also seeking expert views on allowing second-hand import of IT and telecom equipment as sought by the industry.

A strong view is that such a move will make India a dumping ground for obsolete technology.

Mr Chacko said the ongoing EDI (electronic data interchange) initiative was almost ready and once that was in place, it would enable smooth and speedier processing of traders' documents, probably reducing the time from a few days to 3-4 hours.