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Former Member

Draeback/DEPB/DEEC Scheems

Hi all,

What are these schems in Export Drawback,DEPB,DEEC .

and how can v map it in SAP....

Thanks in Advance

Regards

luckky

Edited by: lucky on Feb 21, 2008 5:47 AM

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  • author's profile photo Former Member
    Former Member
    Posted on Feb 21, 2008 at 05:35 AM

    If u have any idea about these Schems........

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  • Posted on Feb 21, 2008 at 05:43 AM

    Dear lucky

    In International Business, to encourage the exporters, Government of India have introduced various incentive schemes to bring more revenue to country. Listing a few for your information.

    1) Duty Entitlement Pass Book Scheme

    Duty Entitlement Pass Book Scheme (DEPB Scheme)- The scheme is easy to administer and more transparent. The scheme is similar to Cenvat credit scheme. The exporter gets credit when he exports the goods. The credit is on basis of rates prescribed. This credit can be utilised for payment of customs duty on imported goods.

    The objective of the scheme is to neutralise incidence of customs duty on the import content of export product. The neutralisation shall be provided by way of grant of duty credit against the export product.

    Exports under DEPB scheme are allowed only when DEPB rate for the concerned export product is finalised.

    Under this scheme, exporters will be granted duty credit on the basis of notified entitlement rates. The entitlement rates will be notified by DGFT. The entitlement rates will be a % of FOB. The entitlement rate will be fixed on basis of SION (Standard Input Output Norms) and deemed import content. Value addition achieved in export product will also be taken into account. Supplies made to unit in SEZ are also entitled to DEPB. DEPB is issued only on post-exportation basis. Excise duty paid in cash on inputs will be eligible for brand rate of duty drawback.

    2) Export Promotion Capital Goods (EPCG) scheme

    EPCG scheme - Under Export Promotion Capital Goods (EPCG) scheme, a licence holder can import capital goods (i.e. plant, machinery, equipment, components and spare parts of the machinery) at concessional rate of customs duty of 5% and without CVD and special duty. Computer software systems are also eligible. Import of spares of capital goods is permitted, without any limit. Jigs, fixtures, dies, moulds will be allowed to the extent of 100% of CIF value of licence. Spares for existing plant and machinery can also be imported. Second hand capital goods upto 10 year old can also be imported under EPCG scheme.

    EPCG authorisation is issued with validity period of 24 months

    3) Advance License

    An advance licence is granted for the import of inputs without payment of basic customs duty. Such licences shall be issued in accordance with the policy and procedure in force on the date of issue of the licence and shall be subject to the fulfillment of a time-bound export obligation, and value addition as maybe specified. Advance licences maybe either value based or quantity based.

    As per the latest amendments to the EXIM Policy, the facility of Back to Back Inland Letter of Credit has been introduced, to enable an Advance Licence holder to source his inputs from domestic suppliers.

    Value based advance license

    Under a value based advance licence, any of the inputs specified in the licence maybe imported within the total CIF value indicated for those inputs, except inputs specified as sensitive items.

    Under a value based advance licence, both the quantity and the FOB value of the exports to be achieved shall be specified. It shall be obligatory on the part of the licence holder to achieve both the quantity and FOB value of the exports specified in the licence.

    4) Drawback

    Drawback is allowable if any manufacture, process or any operation is carried out in India section 75(1) of Customs Act. Thus, drawback is available not only on manufacture, but also on processing and job work, where goods may not change its identity and no ‘manufacture’ has taken place.

    Type of Drawback Rates – All Industry Drawback rates are fixed by Directorate of Drawback, Dept. of Revenue, Ministry of Finance, Govt. of India, Jeevan Deep, Parliament Street, New Delhi - 110 001. The rates are periodically revised - normally on 1st June every year. Data from industry is collected for this purpose. The types of rates are as follows :

    All Industry Rate - This rate is fixed under rule 3 of Drawback Rules by considering average quantity and value of each class of inputs imported or manufactured in India. Average amount of duties paid is considered. These rates are fixed for broad categories of products. The rates include drawback on packing materials. Normally, the rates are revised every year from 1st June, i.e. after considering the impact of budget, which is presented in February every year. All Industry drawback rate is not fixed if the rate is less than 1% of FOB Value, unless the drawback claim per shipment exceeds Rs 500.

    The AIR (All Industry Rate) is usually fixed as % of FOB price of export products. However, in respect of many export products, duty drawback cap (ceiling) has been prescribed, so that even if an exporter gets high price, his duty drawback eligibility does not go above the ceiling prescribed.

    Brand Rate - It is possible to fix All Industry Rate only for some standard products. It cannot be fixed for special type of products. In such cases, brand rate is fixed under rule 6. The manufacturer has to submit application with all details to Commissioner, Central Excise. Such application must be made within 60 days of export. This period can be extended by Central Government by further 30 days. Further extension can be granted even upto one year in if delay was due to abnormal situations as explained in MF(DR) circular No. 82/98-Cus dated 29-10-1998.

    Special Brand Rate - All Industry rate is fixed on average basis. Thus, a particular manufacturer may find that the actual duty paid on inputs is higher than All Industry Rate fixed for his product. In such case, he can apply under rule 7 of Drawback Rules for fixation of Special Brand Rate, within 30 days from export. The conditions of eligibility are (a) the all Industry rate fixed should be less than 80% of the duties paid by him (b) rate should not be less than 1% of FOB value of product except when amount of drawback per shipment is more than Rs. 500 (c) export value is not less than the value of imported material used in them - i.e. there should not be ‘negative value addition’.

    thanks

    G. Lakshmipathi

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  • author's profile photo Former Member
    Former Member
    Posted on Feb 21, 2008 at 06:07 AM

    hi lucky,

    just got hold of some good notes, pl check :

    Export Management enables the effective management of the business of an exporter and importer. EMS is a complete solution and not just a simple documentation system. It computerizes all the operations of an export department and covers enquiry, negotiation, order confirmation, pre & post shipment documentation, L.C. tracking, realization, alerts and export benefits tracking (A/L, DFRC, DEPB & duty drawback).

    The Import Management caters to Enquiry to Suppliers, Quotation from Suppliers, Order to Suppliers, Letter of Credit, Pre-Shipment Invoice, Bill of Entry, Custom Duty Tracking, Bond warehouse, Goods Issue, Supplier Invoice, Payments, Product movement and Licence Tracking.

    Thus, as an importer, you can track and manage the goods, payments and documents through the Import life cycle and generate important reports. The Import department in an organization can function smoothly and efficiently, with the help of the Import module.

    EMS generates Proforma, Order confirmation, Pre-shipment & Post-shipment documents as per the ADS format and various MIS reports like Export register. EMS also tracks the Export Benefits like Advance licence , Duty drawback, DEPB and DFRC.

    EXPORTS

    EMS comprises of the following modules:

    Order Processing: The Order processing module consists of Enquiry, Quotation & Confirmed Order.

    Enquiry :- The system has a provision to monitor Buyer's Enquiries. Enquiry details consist of Buyer details, Item details, Payment terms, mode of Shipment and Packing Information.

    Quotation and Negotiation:- Based on the Buyer's enquiries a quotation can be prepared and sent to the buyer to bid for an order. The system generates quotations from enquiries. Quotations can also be prepared without referring to any Enquiry. To facilitate negotiation, quotations can be revised and also created from existing quotations.

    Confirmed Order :- The system maintains confirmed Buyer's Orders which are generated from Quotations. Confirmed orders can be prepared without referring to the quotation. They can also be prepared from existing confirmed orders. Scheduling of shipment of items and amendments to the confirmed order are also facilitated.

    Letter Of Credit :- EMS maintains Letter Of Credit (L.C.) details for confirmed Orders.

    Shipment:- Shipment details may be of two types viz. Pre-Shipment & Post-Shipment

    Pre-Shipment :- Pre-Shipment details are generated from Order Confirmation. There can be one or more pre-shipment invoices for each Confirmed Order.

    Post-Shipment :- Post-Shipment details are generated from Pre-Shipment. An Export Invoice is generated from one or more pre-shipment invoices.

    Realization :- It involves Realization details such as Export Invoice for which the payment is being realized, the currency, the exchange rate, the amount realized etc.There can be several realization entries for one Export Invoice and several export invoices for an L.C.

    Alarm : The alarm module gives you the pending status of the transaction activities such as quotations, order confirmations and shipments. The pending status can be filtered company-wise and buyer-wise.

    Export Benefits : The export management system tracks Export Benefits such as Advanced License ( D.E.E.C ), Duty Entitlement Passbook Scheme ( D.E.P.B ) and Duty Drawback. They could be pre-export or post-export.

    Detailed export benefit modules are also available as an option.

    1. Advance License (AL): An exhaustive Advance licensing module takes care of various issues from the application for AL to transfer,surrender and closure. The AL Application can be generated along with a host of relevant MIS reports.

    2. Duty Entitlement Passbook Scheme(DEPB): The DEPB module takes care of various issues from the application of DEPB (pre and post export) to transfer, surrender and closure. Besides generating the document for the DEPB application, relevant MIS reports are also provided

    3. Duty Drawback: The main objective of the Duty drawback module is to track the Duty Drawback claimed money for import duty or excise duty paid raw material while exporting the items.

    Documents

    The following pre-shipment documents are generated as per the ADS format

    1. Pre-Shipment Invoice

    2. Pre-shipment Packing List

    3. GR Form in pre-printed format / SDF form.

    4. Shipping Instructions.

    5. Proforma Invoice

    The following post-shipment Documents are generated as per the ADS format

    1. Export Invoice

    2. Final Packing List

    3. Bill of Exchange on plain paper and pre-printed format

    4. Bill of Lading Instructions.

    5. Certificate of Origin in pre-printed format.

    6. Bank Certificate of Export.

    7. Generalized System of Preferences (GSP) in pre-printed format.

    8. Shipment Advice

    9. Bank Negotiation Letter

    Any document besides the above mentioned can be generated as per an exporter's needs or as required by the laws of the country.

    The system allows part-shipment as well as clubbing export orders for shipment.

    Reports :- The following MIS reports are generated by the system

    1. Enquiry Register

    2. Quotation Register

    3. Order Status reports

    a.Item-wise

    b.Invoice-wise

    4. L.C. Status report

    5. Sales Analysis report

    a.Product-wise

    b.Agent-wise

    c.Country-wise

    d.Buyer-wise

    6. Export Register

    7. DEPB Utilization Report

    8. Advance Licence Tracking Report

    9. Commission Tracking Report

    IMPORTS

    Enquiry to Vendor :-

    An Importer can raise an enquiry to Vendors.

    Quotation from Vendors :-

    EMS tracks Quotaions based on an enquiry. EMS can generate direct Quotation.

    Purchase Order :-

    EMS generates the confirmed Orders and prints Purchase Order. EMS also tracks the schedules for the order.

    Letter of Credit :-

    EMS tracks the LC details for Imports.

    Bill of Entry

    EMS tracks the Bill of entry details. EMS has a facility to mark each imported item in the bill of entry against the type of licence and licence no. If the item is imported against a licence and the quantity and amount of the items in respective licences will be debited. Once Bill of entry is made, EMS also has a facility to assign items to a physical location (i.e. bonded or non-bonded warehouse). This updates inventory of the respective warehouses. EMS calculates Custom duties.

    Licence Tracking

    EMS tracks the Bill of entry details. EMS has a facility to mark each imported item in the bill of entry against the type of licence and licence no. If the item is imported against a licence and the quantity and amount of the items in respective licences will be debited. Once Bill of entry is made, EMS also has a facility to assign items to a physical location (i.e. bonded or non-bonded warehouse). This updates inventory of the respective warehouses. EMS calculates Custom duties.

    EOU

    Bond 17 Tracking

    Bond 17 can be tracked in EMS. This is linked with Imports Purchase, Exports sales, Job work issue and Job work receipt.

    CT3 and Procurement Certificate

    CT3 application & CT3 certificate in case of Local purchase, and Procurement Certificate application and Procurement Certificate in case of EOU will be generated from EMS.

    Generation of Re-warehousing certificate/Warehousing certificate:

    Re-warehousing certificate/warehousing certificate will be generated from EMS on the basis of information entered in EMS.

    Permission application and Licence Tracking

    Permission Application will be track material and the quantity, which can be issued for a period from and to. Information will also used to track the permission details.

    Letter of Credit

    For Importer

    Application for letter of credit can be printed from the system. EMS will track limit, LC Balance and Purchase Orders against an LC.

    For Exporters

    Details of LC received

    Generation of Re-warehousing certificate/Warehousing certificate:

    Re-warehousing certificate/warehousing certificate will be generated from EMS on the basis of information entered in EMS.

    Permission application and Licence Tracking

    Permission Application will be track material and the quantity, which can be issued for a period from and to. Information will also used to track the permission details.

    [Link|http://www.chenab.com/Emssite/aboutems2.htm]

    regards

    sadhu kishore

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