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No.14/005/106/2004
Feb 27, 2004
Members of the Council (Footwear Panel)
Dear Members,
Sub: DEPB rates
As you are aware, consequent to lowering the peak rate of Basic Customs duty from 25% to 20%, and total exemption on 4% SAD, the DGFT revised the DEPB rates with effect from Feb 9, 2004.
The DEPB rates were reduced drastically ranging between 2% and 5%, which were not
commensurate to the lowering of the duties especially in respect of leather shoes and boots. Since, such sudden drastic changes will have adverse bearing on the export from the leather sector, the Council submitted an exclusive representation dated Feb 10, 2004 to the DGFT, requesting for re-fixing the DEPB rates at realistic levels. And also for giving effect to the changes from April 1 2004 so as to provide sufficient time to the industry to execute the export orders, which were already committed taking into account the previous DEPB rates. The matter was subsequently followed-up with the DGFT office. It was taken-up in a meeting of DEPB Committee held on Feb 20, 2004, as there seem to be some calculation errors in arriving at revised DEPB rates for the aforementioned products.
In this background, we are glad to inform that the DGFT has favourably considered Council's representations and the DEPB rates for leather shoes and boots, and also for PU Unit Sole, have been re-fixed in consonance to the recent duty reductions on the inputs.
The DGFT issued a Public Notice No.52 (RE-03) / 2002-07 dated 26.02.2004 notifying corrected DEPB rates for certain product. The relevant extract is attached herewith for your kind perusal. Accordingly, the applicable DEPB rates for leather shoes and boots will be 7% (as against 6% earlier notifed) and for PU Unit sole it is 10% as against 9%.
The correct rates will have retrospective effect from Feb 9, 2004.
Member-exporters may take note of the above positive developments.
Thanking you,
Yours faithfully,
K Abdul Sattar Khan
Assistant Director
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