The move is in response to a demand by silk exporters for a renewal of DEPB scheme for silk embroidered garments and made-ups. "The textile ministry has indicated that it will impose a value cap of Rs 750 per piece on which the silk embroidered garments can avail DEPB of 15 per cent (around Rs 112)," Silk Export Promotion Council sources said.

Sources said the decision when formally announced was to remain in force until May 2001, when the government would announce fresh DEPB rates. The decision to impose a value cap irrespective of the total value of goods exported, was likely to have a dampening effect on the exports of silk embroidered garments, sources said, adding that already export orders worth Rs 50 crore were held up on account of the sudden withdrawal of DEPB facilites. The ministry of finance by a notification dated November 6, 2000 had withdrawn with immediate effect the DEPB facilities granted to exported embroidered silk garments, fabrics and made-ups.

On its part, department of revenue in its notification clarified that "it was generally never the intention of various DEPB entries in the Textile Product Group to cover embroidered products or products containing metalised yarn, unless the relevant DEPB entry specifically covers such products". Hence by withdrawing the DEPB it was merely recitifying the anomaly.

Sources however pointed out that the words imported beads, sequins had been added to the product description by error by the duty drawback directorate, and on this account, the silk exporters were getting no benefit under the DEPB if he exported any silk embroidered garment or made-ups.