The basic purpose of Duty Entitlement Pass Book scheme is to neutralise the incidence of various types of duties charged in the input material.

The neutralization is provided by grant of duty credit calculated on the basis of standard input-output Norms.

The calculation also takes into account the value addition achieved in Export Product.

The neutralization of incidence of duty is based on consideration of inputs on deemed imports and the rates of various duties of import chargeable on such inputs namely Basic Custom Duty, Surcharge on Basic customs Duty, Additional Duty and Special Additional Duty.

However rates are specified by the Director General of Foreign Trade. Duty entitlement pass Book allows import of all items without payment of Custom Duties provided import of such items are not restricted as per ITC HS code.

However, after being on life support for over a year, the DEPB scheme for reimbursement of customs duty paid for export production will finally be given a quiet burial on March 31, 2007.

To replace it, the Union commerce ministry is likely to put in play an expanded duty drawback scheme that will cover re-imbursement of both customs and excise duties paid for export production. This may be announced in the annual amendments to Export Import Policy 2004-09 to be unveiled on April 1.