DEPB Licence

[Guest]

A company is not a manufacturing unit but is doing only extraction and exporting the output. The unit is also a 100% eou unit and availing customs duty exemptions on packing materials imported. Can this unit obtain DEPB licence for the exports made and sell the licences.

[Snehal Kulkarni]

DEPB means Duty Entitlement Pass Book to neutralise the incidence of basic and special customs duty on import content of export product.

Since the EOU units are already enjoying the basic and special customs duty exemtption, in our view the DEPB Lic can not be obtained.

 

AI Summary

DEPB entitlement unavailable where export units already receive customs duty exemptions, removing the duty incidence DEPB offsets. DEPB neutralizes basic and special customs duty on import content of export products. If an export unit is an EOU already exempt from those customs duties on inputs, the duty incidence DEPB offsets is absent. Therefore an EOU enjoying customs duty exemptions is not eligible to obtain DEPB licences for its exports, and selling such licences is not contemplated under the DEPB entitlement.