Notification No. 42 (RE-2008)/2004-2009 dated 18/9/2008 has been issued to amend the provisions related to amend the para 4.3.1 of the Foreign Trade Policy 2008 relating to eligibility of DEPB on export of goods from DTA units to SEZ units against foreign currency

Existing Provision:

"4.3.1 An exporter may apply for credit, at specified percentage of FOB value of exports, made in freely convertible currency  or payment made from foreign currency account of  SEZ unit / SEZ Developer in case of supply by DTA.

Credit shall be available against such export products and at such rates as may be specified by DGFT  by way of public notice. Credit may be utilized for payment of Customs Duty on freely importable items.  DEPB Scrips can also be utilized for payment of duty against imports under EPCG Scheme w.e.f 1.1.2009."

New Provision:

"4.3.1 An exporter may apply for credit, at specified percentage of FOB value of exports, made in freely convertible currency. In case of supply by a DTA Unit to a SEZ Unit /SEZ Developer / Co-Developer, an exporter may apply for credit for exports made in freely convertible currency or payment made from foreign currency account of SEZ Unit / SEZ Developer /Co-Developer. In addition, the exporter shall also be entitled 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."

DEPB eligibility expanded to cover DTA to SEZ supplies, allowing rupee or foreign currency payments to qualify for credit. Amendment expands DEPB eligibility for supplies by DTA units to SEZ units/developers/co-developers: exporters may claim credit on FOB export value realised in freely convertible currency or via payment from the SEZ entity's foreign currency account, and exporters are entitled to DEPB benefit where SEZ developers or co-developers make payment in Indian rupees for applicable supplies; DEPB credits remain utilisable for customs duty and as prescribed by authorities.