The decision to restore the Duty Entitlement Pass Book (DEPB) scheme on cotton yarn would be on a retrospective effect basis from April 2011 and on cotton from October 2010, according to a Directorate General of Foreign Trade notification
New Delhi: The government has notified the restoration of incentives on export of cotton and cotton yarn following a sharp fall in domestic and international prices of the commodities, reports PTI.
The decision to restore the Duty Entitlement Pass Book (DEPB) scheme on cotton yarn would be on a retrospective effect basis from April 2011 and on cotton from October 2010, Directorate General of Foreign Trade (DGFT) said.
The government had withdrawn the tax refund benefit on cotton and cotton yarn in April last year. Therefore, the DEPB tax refund scheme for exporters has been made effective from that date.
Under the scheme, exporters are given a refund of the tax incidence on the import content of their export products.
Cotton yarn has been placed under Open General Licence (OGL) for exports from April 2011. Similarly, last week the government also lifted the export restriction on cotton.
Exports of cotton were disincentivised by virtue of export tax, following a sharp rise in prices in January 2011.
With easing of export curbs, the DEPB has also been restored. Prices took a reverse turn by end of March and fell sharply both in the global and domestic market.
Prices of cotton have declined to Rs150 per kg now from over Rs170 a kg in August last year.
According to estimates, cotton production projection has been increased to 325 lakh bales for the current season.
The projection for domestic consumption of cotton this season has been lowered to 236 lakh bales, as against the earlier estimate of 265 lakh bales, on account of high inventories.