PROCEDURE FOR CLAIMING/SUBMISSION OF APPLICATION FOR DUTY ENTITLEMENT PASS
BOOK SCHEME
Introduction
In Terms of Para 7.14 of the current Export & Import Policy, the exporters not
desirous of going through the licensing route an optional facility is given
under DEPB scheme. The objective of Duty Entitlement Passbook Scheme is to be
neutralise the incidence of customs duty on the import content of the export
product. The neutralisation shall be provided by way of grant of duty credit
against the export product.
Under the Duty Entitlement Passbook Scheme (DEPB), an exporter may apply for
credit, at a specified percentage of FOB value of exports, made in freely
convertible currency. The credit shall be available against such export products
and at such rates as may be specified by the Director General of Foreign Trade
by way of public notice issued in this behalf, for import of raw materials,
intermediates, components, parts, packaging material etc.
The holder of Duty Entitlement Passbook Scheme (DEPB) shall have the option to
pay additional customs duty, if any, in cash as well.
Procedure for claiming DEPB Pass Book
As per para 7.38 of the current hand book of procedure vol-I, an application for
grant of credit under DEPB may be made to the licensing authority concerned in
the form given in Appendix-11C along with the documents prescribed there in. The
provision of paragraph 7.2 shall be applicable for DEPB also. Reproduced below
the provision for ready reference: “An Advance Licence is issued under Duty
Exemption Scheme to allow import of inputs which are physically incorporated in
the export product (making normal allowance for wastage). In addition, fuel,
oil, energy, catalysts etc. which are consumed in the course of their use to
obtain the export product, may also be allowed under the scheme.” The FOB value
in free foreign exchange shall be converted into Indian rupees as per the
authorised dealer’s T/T buying on demand buying rate, as the case may be,
prevalent on the date of negotiation / purchase / collection of document. The
DEPB rate of credit shall be applied on the FOB value so arrived.
Validity of DEPB Entitlement Pass Book
Under para 7.15 the DEPB shall be valid for a period of 12 months from the date
of issue.
Transferability of DEPB Entitlement
The DEPB shall be initially issued with non-transferable endorsement in such
cases where the realisation has not taken place to enable the exporter to effect
import for his own use. However, upon receipt of realisation, the DEPB shall be
endorsed transferable. In such cases, where the applicant applies for DEPB after
realisation, the DEPB shall be issued with transferable endorsement.
The DEPB and/or the items imported against it are freely transferable. The
transfer of DEPB shall however be for import at the port where from export have
been made. However, import from a port other than the port of export shall be
allowed under TRA facility as per the terms and conditions of the notification
issued by Department of Revenue. However, the facility of transferability may be
allowed against DEPB without insisting on realisation of export proceeds if the
shipments are made against irrevocable letter of credit and the same is
certified by the bank in column 14/15 of Appendix 25.
Monitoring & Penalty for non compliance
If the export proceeds is not realised within six months or such extended period
as may be allowed by RBI, the DEPB holder shall pay in cash an amount equivalent
to the duty of free credit utilised on imports, including SAD, against such
exports with 24% interest from the date of import till the date of deposit. In
such cases, where the amount realised in foreign exchange is less than the
amount on which DEPB credit has been obtained, the holder of DEPB shall pay, in
cash, an amount proportionate to the duty free credit utilised on import
including SAD with 24% interest from the date of import to the date of deposit.
The Regional Licensing Authority shall monitor the cases where the DEPB has been
granted prior to realisation of export proceeds so as to ensure that realisation
takes place within the prescribed time failing which they shall initiate action
for recovery of an amount equivalent to DEPB credit with 24% interest. The
recovered amount in such cases shall be deposited in the head of Account of
Customs. The detailed procedure has been provided in paragraph 7.29 of Hand Book
& Procedure.
In such cases where the application for grant of DEPB credit is filed after
realisation of export proceeds, the FOB value in free foreign exchange shall be
converted into Indian rupees as per authorised dealers T/T buying on demand
buying rate, as the case may be, prevalent on the date of realisation of
proceeds. The DEPB rate of credit shall be applied on the FOB value so arrived.
The CIF value of import effected under the DEPB shall not exceed the FOB value
against the DEPB has been issued. The licensing authorities shall incorporate an
endorsement to this effect on the DEPB and shall also mention the FOB value in
(Indian rupees) on the DEPB. Online DEPB Electronic Filling
Application, Please visit in http://dgftcom.nic.in.