DEPB SCHEME - REVISION OF DEPB RATES DUE TO FACTORING OF SAD

No.14/005/106/2003
Feb 18, 2003

All Members of the Council

Dear Members,

Sub: DEPB Scheme – revision of DEPB rates due to factoring of SAD

As members are aware, the Council had been constantly pleading with the Government to neutralize the incidence of Special Additional Duty of Customs (SAD) under DEPB, since the element SAD had been separately debited in DEPB scrips while importing inputs / components since April 1, 2002. Since the imports under DEPB were previously exempted from SAD, debiting the element of SAD caused additional financial burden to the exporters on import of essential inputs / components. 

Considering the issue, the DGFT issued Public Notice No.60/2002 dated 21.1.2003 amending Para 4.37 of the Export Import Policy to the effect that the duty credit under DEPB scheme shall be calculated by taking into account the incidence of Basic Customs Duty(BCD) and SAD on the deemed import content of the export products as per SION. This paragraph was amended to specifically neutralize the incidence of SAD through DEPB and it was given retrospective effect from 1st April 2002.

Based on such decision, the DEPB rates for various export products were re-worked to neutralize the incidence of SAD. The Directorate General of Foreign Trade has now issued Public Notice 62/2003 dated Feb 17, 2003, notifying the revised DEPB rates for different products including leather & leather products. A copy of the said Public Notice along with schedule of revised DEPB rates for leather & leather products is enclosed at Annexure I. It may be noted that:

a) there is 1% to 3% increase in the new DEPB rates against the previous rates 
b) the revised rates are effective from April 1, 2002

Simultaneously, the DGFT also issued Public Notice No.63/2003 dated Feb 17, 2003, which contain the modalities & guidelines to be followed by applicants for obtaining supplementary DEPB scrips on account of the factoring of SAD. A copy of the said Public Notice is enclosed at Annexure II.

You can also find these notifications on the Council’s website.

Member-exporters may take note of the above changes in the DEPB scheme and avail the benefit accordingly.

With regards,
Yours sincerely,

S. Audiseshiah
Executive Director