New Delhi: In an effort to incentivise steel exports, the government may soon restore the duty entitlement passbook scheme (DEPB) for the industry, an official said.
Responding to the steel sector’s demand, the Ministry of Commerce is understood to have forwarded the proposal for DEPB restoration to the Committee of Secretaries (CoS), said the official.
“It is now up to the CoS to take a final call,” a senior official with the Steel Ministry said.
Under the DEPB scheme, companies can avail of refund of customs duty paid on imported raw material for manufacturing products meant to be exported under the norms of the Directorate General of Foreign Trade.
The government had in mid-June withdrawn DEPB benefits for the steel sector as part of inflation control measures and to augment the domestic supply of the commodity.
Now that there is a slump in demand for steel and prices have fallen steeply due to the global economic recession, the industry wants the scheme re-introduced and also the 15% import duty on steel re-imposed to ward off cheaper shipments from China and Ukraine.
“Even if there isn’t much scope for steel producers to export now because demand has fallen, providing DEPB benefits will surely help the industry when the international market improves,” said an official of a steel company.
The restoration of the scheme will come as a respite for steel companies that have long-term export commitments, he added.
In India, almost all steel producers used to avail of the DEPB scheme till it was withdrawn. The DEPB rate normally varies between 2 and 8% on iron and steel items.