Exporters' relief likely for SEZs, EoUs too
Exporters in special economic zones (SEZ) and export-oriented units (EoU) are also likely to be given the duty entitlement passbook (DEPB) and duty drawback enhancement benefits, given out by the government to other exporters recently, to offset the losses incurred due to the rising rupee.
Currently, export units in SEZs and EOUs are not eligible to DEPB and duty drawback benefits as they are primarily for input duties which are not applicable on these zones and units.
However, now these units are also being considered for the benefits on account of state levies and the rupee appreciation factor.
The government had announced a Rs 1,400 - crore relief package to rupee-hit exporters which included 2.5-3% enhancement in DEPB and duty drawback rates.
Accoding to SEZ and EOU schemes, the exporters in such zones can import or procure from the domestic market any raw material they require without payment of any duty. However, the export promotion council for the SEZs and EOUs has now pointed out to the commerce ministry that since the enhancement of the DEPB and duty drawback rates were carried out due to the appreciation in the rupee, this was applicable to EOUs and SEZs as well. They are also facing several state levies such as stamp duty, octroi, entry tax and electricity duty.
Accordingly, the commerce ministry has asked the finance ministry to extend to the SEZs and EOUs the enhancement relief in DEPB and drawback rates in the form of transferable DEPB scrips or as drawback.
The commerce ministry's committee on the impact of rupee appreciation, headed by additional secretary R Gopalan, in its report in July had also mentioned that the affected exporters in EOUs and SEZs should also be given these enhancement benefits.
Meanwhile, speaking at a CII interactive session on foreign trade here, the Director-General of Foreign Trade, R S Gujral, said the government would bring out the new DEPB scheme by November. Gujral, however, asked the exporters to learn to live with exchange rate fluctuations as it would be a regular phenomenon in the process of economic growth.
"Exporters must cut cost to become competitive and learn to hedge against the exchange rate fluctuation risks," he added.
Gujral said he would be holding a series of meetings in this regard to look into suggestions, including neutralisation of state and central taxes as well as covering transaction costs.
Source: The Financial Express
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