Page 265 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

International Trade Procedures and Documentation

Notes documents prescribed therein. An application for DFRC shall be filed only after realisation of
export/supply proceeds. However, in case of exports/supplies against:
(a) Confirmed irrevocable letter of credit or confirmed irrevocable inland letter of credit
(b) Bill of exchange is unconditionally Avalised/Co-Accepted/Guaranteed by a bank and the
same is confirmed by the exporter’s bank,
The application may be filed after exports/supplies.
The application for DFRC shall be filed within six months from the date of realisation in respect
of all shipments/supply for which DFRC is being claimed. In case of exports against confirmed
irrevocable Letter of Credit/supply against confirmed irrevocable Inland Letter of Credit or
Bill of Exchange is unconditionally Avalised/Co-Accepted/Guaranteed by a bank and the same
is confirmed by the exporters bank, the DFRC shall be filed within six months from the date of
exports/supply for all shipments in respect of which DFRC is being claimed. For exports/
supply against advance payment, DFRC shall be filed within six months from the date of exports
against advance payment. Wherever provisional shipment has been allowed by the customs
authorities, DFRC against such exports shall be issued only after the release of the shipping bill
by the Customs. The time limit for filing of application in such cases shall be six months from
the date of release of shipping bill or three months from date of realisation, whichever is later.
The applicant shall file one application relating to one export product group from one port of
export. Where export products falling under one product group have been exported from different
ports, the exporter shall file more than one application for the same export product group.

12.7.1 Duty Entitlement Passbook (DEPB) Scheme

Under DEPB (Duty Entitlement Passbook) Scheme, exporters are allowed to claim customs duty
credit as a specified percentage of FOB value of exports made in freely convertible currency. The
objective of DEPB is to neutralize the incidence of Customs duty on the import content of the
export product. The neutralization shall be provided by way of grant of duty credit against the
export product.
The scheme launched in 1997 is likely to be replaced by some superior alternative that is being
worked out through a dialogue with the export community. Under the DEPB, an exporter is
eligible to apply for credit, as a specified percentage of FOB value of exports, made in freely
convertible currency. This credit is available against such export products and at such rates as are
specified by the Director General of Foreign Trade by way of public notice issued in this behalf,
for import of raw materials, intermediates, components, parts, packaging material, etc.
The DEPB is valid for a period of 24 months from the date of issue. The DEPB and/or the items
imported against it are freely transferable. The transfer of DEPB shall however be for import at
the port specified in the DEPB, which shall be the port from where exports have been made.
Normally, the exports made under the DEPB Scheme are not eligible for drawback. However,
the additional customs duty/excise duty paid in cash or through debit under DEPB shall be
adjusted as CENVAT Credit or Duty Drawback as per rules framed by Department of Revenue.

DEPB credit may also be utilized for payment of customs duty on any item which is freely
importable. The holder of DEPB is permitted the option to pay additional customs duty, if any,
in cash as well. DEPB credit is available only for those items for which rates are available.
Therefore, the exporters are not in a position to avail of this facility in respect of items for which
DEPB rates have not been announced.

260 LOVELY PROFESSIONAL UNIVERSITY