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Unit 14: Tertiary Sector in the Indian Economy

2. Duty Entitlement Passbook Scheme (DEPB): This is a scheme accessible for a manufacturer, Notes
exporter, Trading House, Export House, Star Trading House and Super Star Trading House.
The objective of the scheme was to streamline the import procedures for exporters by
offering duty-free access to imported inputs for exporters or manufacturers. The schemes
are broader in scope and more flexible than the earlier advances licensing schemes.
Imports utilised for export production were exempted from customs duty as well as from
extra duties on imports for an exporter holding Import Export Pass book involving import
license. The passbook is useful only to registered manufactured exporters.
The goal of DEPB is to neutralize the incidence of customs duty on import content of
export product. Component of customs duty on fuel shall also be factored in the DEPB
rate. Component of Special Additional Duty shall also be permitted under DEPB (as brand
rate) in instance of non-availment of CENVAT credit. Neutralisation shall be offered by
the way of grant of duty credit against export product.
An exporter may apply for credit, at stated percentage of FOB value of exports, made in
freely convertible currency. In instance of supply by a DTA unit to a SEZ unit/SEZ
Developer/Co-Developer, an exporter may apply for credit for exports made in liberally
convertible currency or payment made from foreign currency account of SEZ Unit/SEZ
Developer/Co-Developer. Additionally, the exporter shall also be eligible for DEPB benefit
in case payment is made in Indian Rupees by SEZ Developer/Co-Developer for supplies
received w.e.f. 10.2.2006.

3. Duty Draw Back System: The Duty Drawback system compensates exporters for the tariffs
paid on the imported materials and intermediates as well as central excise duties paid on
domestically produced generated inputs which enter into export production.
4. Replenishment and Imprest Licenses: These licenses were offered to the exporter to have
an access to otherwise limited material, (even imports) or canalized, that too of good
quality, for the motive of exports, or to be utilised as a raw material to produce export
goods. The goal of this license is to make sure the availability of qualitative raw material
in adequate quantity and at the right time at competitive prices for export growth.
Impress licenses are granted based on export contracts or on past export performance and
the material must really be used in exports. REP licenses are granted against actual exports
after they have occurred, and to the extent that imported material is not needed. The REP
entitlement can be legitimately sold on the open market.
5. Advance License: Advance license is issued for the duty-free imports of raw material,
consumables, components, intermediates, parts, spares, etc. Advance license may either
be quantity-based or value-based.
6. Tax Benefit: To encourage exports, government exempts the export profits from tax under
80 HHC provision of the IT Act.
7. Finance Facility: Credit facility is made accessible to the exporters for purchase, manufacture
and packaging before the shipment, as also post-shipment, credit amenities. Medium and
long-term credits are also made accessible for the export of capital equipment. Assistance,
in the shape of grants, is offered to the export promotion councils, sanctioned organizations,
export houses, consultancy organization and individual exporters to conduct:
(i) Market research, commodity research, etc.,
(ii) To send trade delegation and teams,

(iii) For export publicity and spreading of information,
(iv) For setting up of offices and branches in countries abroad,

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