New Delhi: Commerce and industry minister Anand Sharma on Wednesday met finance minister Pranab Mukherjee and is believed to have discussed introduction of an alternative to DEPB, tax-refund scheme for exporters, ending 30 September.
While the government has ruled out any more extension of 14-year old Duty Entitlement Pass Book (DEPB) scheme, it is working on another drawback plan for partly making up the loss of tax refunds given to exporters.
“The commerce and finance ministries are jointly working on an alternative for export incentives,” an official said after the meeting.
The government spends annually about Rs 8,500 crore for reimbursing exporters on the taxes paid on import equivalent content of export products, under DEPB. The main beneficiaries are engineering, automobile and chemicals sectors.
Though exports have shown a remarkable performance, growing by 54.2% between April-August 2011 to $134.5 billion, there are concerns that the momentum may not be sustained in the wake of increasing economic problems in the US and Europe.
Exporters have been demanding that the fiscal incentives in the alternative scheme should be equivalent to those provided in the DEPB.
The commerce ministry is sympathetic to their demand, sources said adding, however that the finance ministry needs to be convinced.
Sharma is also believed to have discussed with Mukherjee the issues related to the proposed National Manufacturing Policy which is likely to come up before the cabinet on Thursday.