DEPB - Duty Entitlement Passbook Scheme

The Duty Entitlement Passbook Scheme (DEPB) is a pivotal export incentive implemented by the Indian Government to support exporters. Operating as a credit-refund mechanism for duties paid, the scheme was launched on 1st April 1997. Initially, DEPB included both pre-export and post-export avenues, but the former was abolished from 1st April 2000, leaving post-export DEPB as the sole option.

Scheme Overview

The DEPB scheme encompasses only the post-export component, after the elimination of pre-export DEPB. Here, exporters receive a duty entitlement passbook at a pre-determined credit based on the FOB (Free on Board) value of exports. The DEPB rates facilitate the import of eligible items while prohibiting certain goods like gold nibs, pens, and watches, despite their inclusion under broad categories like writing instruments and watches.

DEPB Rates

DEPB rates are calculated on the lesser of the FOB value or a specified value cap. For instance, if an item's FOB value is Rs. 700 and the cap is Rs. 500, the rate applies to Rs. 500. For more insights on customs duties affecting exporters, refer to types of customs duty.

Benefits of DEPB Scheme

The DEPB scheme benefits extend to products containing extraneous materials up to 5% by weight, which are disregarded in rate calculations. By understanding how customs duty operates, exporters can better utilize these benefits under DEPB.

Review and Implementation of DEPB Rates

The Government frequently reviews DEPB rates, based on comparative data from FOB export values and CIF input values, as prescribed by the Standard Input Output Norms (SION). This data is essential for maintaining accurate rates and is sourced through customs duty exemptions. Implementation involves rationalizing DEPB rates in line with changing customs duties and adjusting caps without verifying Present Market Values (PMV). Expansion of available ports under the Duty Exemption Scheme, which includes DEPB, further supports this implementation.

Provisional DEPB Rate

Provisional DEPB rates encourage the export of diversified products, with rates available for specific periods. Exporters must supply necessary export and import data within this timeframe for permanent rate determinations.

Maintenance of Records and Port of Registration

Customs Houses at ports maintain detailed records of exports under the DEPB Scheme, ensuring streamlined processes. Export and import activities are restricted to selected sea ports, airports, ICDs, LCS, and SEZs. This strategic port selection optimizes logistics and access, particularly for duty exemptions on vital imports.

DEPB Credit and Market Value

The credit under the DEPB cannot exceed 50% of a product's PMV if its credit rate is 10% or more. Exporters declare a shipping bill under DEPB, capped at 50% of PMV; exceptions apply for products with capped values, irrespective of DEPB rates.

Utilization and Re-export of DEPB Credit

DEPB credits serve for paying customs duties, available for free import capital goods. As outlined in RODTEP scheme procedures, exported items found defective upon return can be re-exported, with 98% of the credited amount restored for ongoing use.

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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.