Having failed to find a replacement for the Duty Entitlement Pass Book (DEPB) scheme, the government is planning to extend the scheme till March 2008 and constitute one more committee to look for an alternative.

A joint task force for finding a replacement to the popular duty reimbursement scheme would go through entire gamut of taxes levied on exports at the central and state levels. It will work out a new tax refund scheme that covers all the taxes which the existing scheme was not able to capture for refund. Constitution of the new committee follows recommendations of a committee headed by Planning Commission member Anwal-ul Hoda, which suggested extension of DEPB for three years.

Instead of extending DEPB for three years, the government wants to opt for a yearly revision. The issue of extension will be taken to Cabinet Committee on Economic Affairs (CCEA) for approval, government sources said. The Hoda committee made the recommendations for extension of DEPB after it failed to achieve a consensus among ministries on replacement of the scheme. Sources said the finance ministry was opposed to the refund of state-level taxes through exporters from Centres coffers.

The joint task force would also ensure that the new scheme replacing DEPB is WTO compliant. The revenue foregone on account of DEPB is expected to touch Rs 4,873 crore this fiscal, down from Rs 5,650 crore in 2005-06.