Depb - Duty Entitlement Passbook Scheme

Duty Entitlement Passbook Scheme (DEPB) is an export incentive scheme implemented by the Indian Government to the exporters of the country. The scheme refunds duties that are paid by the exporters in the form of credit. This scheme came into force on 01.04.1997, had both pre-export and post-export Depb of which, the latter was abolished on 01.04.2000. This article describes the features of the scheme.

Scheme Overview

DEPB scheme comprised two parts namely the post-export and pre-export of DEPB. However, pre-export was eliminated from 01.04.2000. Post-export is issued after the exports, where the exporter is given a duty entitlement Pass Book Scheme at a pre-determined credit on the FOB value. The DEPB rates permit the import of any items except the items that are prohibited from importing. Items like Gold Nibs, Gold Pen, Gold watches etc. though covered under the generic description of writing instruments, components of writing instruments and watches that are still not eligible to benefit under the Depb scheme.

Depb Rates

The DEPB rates are applicable based on FOB value or the value cap, whichever is the least. If an item's FOB value is Rs. 700, and the cap value is Rs. 500, the Depb rate shall be applied on Rs. 500.

Benefits of Depb Rates

The benefit of the DEPB scheme shall be available on the exported products that are having an extraneous material up to 5% by weight. In such cases, the extraneous material that is up to 5% shall be ignored and the actual Depb rate for the export product will be considered.

Review of Depb Rates

The Government of India reviews the Depb rates after receiving the appropriate export import data on the FOB value of exports and the CIF value of inputs that are used in the export product as per SION. This data and information have to be obtained from the concerned Export Promotion Councils.

Implementation of Depb Rates

Given below are the facilities that are provided to implement the Depb Rates.

Depb rates are rationalized to the account for the changes in the customs duties.
The caps are fixed on certain items but there would be no verification of Present Market Value(PMV) on these items.
A number of ports have been added in order to avail the facilities under the Duty Exemption Scheme, including the Depb.
The threshold limit of Rs. 200 million to fix new Depb rates have been removed.

Provisional Depb Rate

The purpose of provisional DEPB rates is to encourage the diversification and to promote the export of new products. However, the provisional Depb rates are valid only for a limited period of time when the exporter has to furnish data on export and import for regular fixation of rates.

Maintenance of Records

It is mandatory for the Custom House at the ports to maintain a separate record of details for exports that are made under the Depb Schemes.

Port of Registration

The export and import can be made only from selected ports. They are given below.

Sea Ports Mumbai, Kolkata, Cochin, Dahej, Kakinada, Kandla, Mangalore, Marmagoa, Mundra, Chennai, Nhavasheva, Paradeep, Sikka, Tuticorin, Pipavav, Jamnagar, Vishakhapatnam, (Magdalla), Nagapattinam, Dharamtar, Okha ,and Surat . Airports Ahmedabad, Bhubaneshwar Mumbai, Kolkata, Bangalore,Coimbatore Air Cargo Complex, Cochin, Delhi, Hyderabad, Srinagar, Trivandrum, Jaipur, Varanasi, Chennai and Nagpur. ICDs Ahmedabad, Agra, Bangalore, Bhiwadi, Coimbatore, Daulatabad, (Wanjarwadi and Maliwada), Delhi, Dighi (Pune), Faridabad, Hyderabad, Guntur, Jaipur, Jallandhar, Kanpur, Kota, Ludhiana, Jodhpur, Madurai and the land Customs station at Ranaghat Mallanpur, Meerut, Moradabad, Nasik, Nagpur, Pitampur (Indore), Gauhati (Amingaon), Pimpri (Pune), Rudrapur (Nainital), Surat, Salem Singanalur, Tirupur, Udaipur, Varanasi, Vadodara, Waluj, Bhilwara, Dappar, Pondicherry ,Garhi-Harsaru, Bhatinda, Chheharata (Amritsar), Miraj, Rewari and Karur. LCS Ranaghat, Raxaul, Jogbani, Singhabad, Nautanva ( Sonauli), Petrapole and Mahadipur. The exports made to the given below Special Economic Zones (SEZ) can also avail Depb. SEZ Santacruz, Kandla, Kochi, Vishakhapatnam, Chennai, Falta, Surat, Noida.

The credit under Depb and Present Market Value

For products that have a rate of credit entitlement under DEPB scheme comes to 10% or more, the amount of credit against each such export product does not exceed 50% of the present Market Value (PMV) of the export product. At the time of export, the exporter declares a shipping bill that benefits under the DEPB scheme that does not exceed 50% of PMV of the export product. Nevertheless, the PMV declaration will not be applicable to products that have value cap irrespective of Depb rate of the product.

Utilization of Depb Credit

The credit given under the Depb scheme is utilized for payment of Indian customs duty including the capital goods that are free to import.

Re-export of Goods Imported under Depb Scheme

As per the Exim guidelines by the Department of Revenue, exported goods that are returned and are found to be defective or unfit for use shall again be exported. In cases like this, 98% of the credit amount that is debited against DEPB for the export of goods. This is generated by the concerned Commissioner of Customs in the form of a certificate that contains the amount generated and the details of the original DEPB. A new DEPB is issued by the concerned DGFT Regional Authority. The issued Depb has to have the same port of registration and should be valid for a period that is equivalent to the balance period that is available on the date of import of the defective or unfit goods.

Back to Learn

Frequently Asked Questions

Common questions about Duty Entitlement Passbook Scheme: DEPB Rates & Benefits.

The Duty Entitlement Passbook Scheme (DEPB) is an export incentive scheme implemented by the Indian Government to provide refunds on duties paid by exporters in the form of credit. It was introduced on 01.04.1997 and initially had both pre-export and post-export components, but the pre-export component was abolished on 01.04.2000.

The DEPB rates are calculated based on the lower of the FOB (Free on Board) value or a predetermined value cap. If an item's FOB value is higher than the cap value, the DEPB rate is applied on the cap value.

One benefit is that exporters can avail DEPB rates for exported products containing up to 5% extraneous material by weight, without considering that extraneous portion. Additionally, the DEPB credit can be utilized for paying Indian customs duties, including those on capital goods imports.

The Government of India reviews and rationalizes the DEPB rates periodically after receiving relevant export-import data and information from the concerned Export Promotion Councils. This accounts for changes in customs duties and other factors.

A provisional DEPB rate is a temporary rate assigned to encourage the export of new products or diversification. However, exporters must provide data on exports and imports within a limited time for regular rate fixation.

The DEPB scheme can be utilized at several designated sea ports, airports, inland container depots (ICDs), land customs stations (LCS), and special economic zones (SEZs) across India, as listed in the article.

Yes, for products with a DEPB rate of 10% or more, the credit amount cannot exceed 50% of the present market value (PMV) of the export product, unless a value cap is applicable.

Yes, if exported goods imported under the DEPB scheme are found to be defective or unfit for use and are returned, they can be re-exported. In such cases, 98% of the credit debited against the original DEPB is refunded through a new DEPB issued by the DGFT Regional Authority.

Yes, certain items like gold nibs, gold pens, gold watches, and prohibited imports are not eligible for DEPB benefits, even if they fall under a generic category of writing instruments or watches.

Yes, it is mandatory for the Custom House at the ports to maintain a separate record of details for exports made under the DEPB scheme.