Audit Reports
Indirect Tax
Report No. 9 of 2014 - Performance Audit on Duty Entitlement Pass Book Scheme Union Government, Department of Revenue - Revenue-Indirect Taxes,Customs
Overview
India's exports have picked up in the recent years which rose by 15 per cent (CAGR) against global export growth of 5 per cent, with our share in global exports moving up from around 0.5 per cent in 1992 to 1.4 per cent in 2013. However, imports have been rising faster, driven largely by the demands of a growing economy. With the result, the trade balance has been widening and in 2004-05 the current account balance turned negative and has remained in the deficit ever since. This has important implications for price stability and economic growth.
Experts in Government and in Public Policy research, have near unanimity in prescribing reduction in transaction cost; strengthening of trade facilitation; negotiating preferential access to prospective markets; attracting long term investment, and modern technology with a matching reward and incentive trade environment.
Duty Entitlement Pass Book (DEPB), as an incentive scheme was notified vide circular no. 10/1997 dated 17 April 1997. The DEPB scheme substituted the Value Based Advance Licencing (VABAL) scheme and the Pass Book scheme of the earlier Exim policy. This scheme initially consisted of two sub-schemes, viz 'Pre-export DEPB' and 'Post-export DEPB'. The pre-export DEPB scheme was abolished with effect from 1 April 2000. After several extensions through the years, the post-export scheme was phased out on 30 September 2011 and thereafter DEPB items were incorporated into the Duty Drawback Schedule with effect from 1 October 2011.