The Central government on Tuesday capped export incentives under the Merchant Export from India Scheme (MEIS) at Rs 2 crore per exporter on outbound shipments executed during September 1 to December 31, 2020 period.
Under MEIS, the government provides duty benefits in form of rewards as payable as a percentage of realised free-on-board value and MEIS duty credit scrip can be transferred or used for payment of a number of duties, including the basic customs duty.
The move comes after the Department of Revenue asked the commerce ministry to review the coverage of Merchant Export from India Scheme (MEIS) so that the fiscal benefits under the programme can be brought down to Rs 9,000 crore from the Rs 45,000 crore in the current financial year, FY21.
“A limit on total reward under MEIS has been imposed so that for exports made in the period September 1, 2020 to December 31, 2020, the total reward which can be claimed by an IEC (Import Export Code) holder does not exceed the ceiling of Rs 2 crore,” the Directorate General of Foreign Trade (DGFT) said in a notification.
Further, it has been notified that any IEC holder who has not made any exports for a period of one year preceding September 1, 2020 or any new IECs obtained on or after the date of publication of this notification would not be eligible for submitting any claim under this scheme.
“The ceiling will be subject to further downward revision to ensure that the total claim under MEIS for the period (September 1 to December 31, 2020) does not exceed the prescribed allocation by the government, which is Rs 5,000 crore,” it said.
“98 per cent of exporters especially MSMEs will benefit under MEIS with reward cap of Rs 2 crore/ IEC from 1st September to December 31, 2020. This will remove uncertainty and protect genuine exporters while ensuring Make in India-Make for the World,” Commerce & Industry Minister Piyush Goyal said in a tweet.
98% of exporters esp MSMEs will benefit under Merchandise Exports from India Scheme (MEIS) with reward cap of Rs. 2 Cr/ Importer Exporter Code from 1st Sep to 31 Dec 2020. This will remove uncertainty & protect genuine exporters while ensuring Make in India-Make for the World. pic.twitter.com/m06OeSxw6k
— Piyush Goyal (@PiyushGoyal) September 1, 2020
The MEIS scheme, introduced in April 2015, will close down by December 31, 2020, and the government has already announced the Remission of Duty or Taxes on Export Products (RoDTEP) scheme to replace MEIS. Under RoDTEP, the remission of embedded taxes and other levies on exports shall be allowed.
