GOI have decided to cap the export incentives under the Merchandise Export from India Scheme(MEIS).
“These benefits are part of the export competitiveness. The sudden change will affect the exporters’ financially as buyers are not going to revise their prices upward,” President of Federation of Indian Export Organisations(FIEO) stated in conclusion.
However, This Tuesday GOI capped the benefits under MEIS at Rs 2 crore per exporter. This will include exports from Sep-Dec 2020. Additionally, Import Export Code (IEC) on or after Sep 1st will be ineligible to submit any MEIS claim. On the other hand, ceiling would subject to a downward revision. This will ensure the total claim to not exceed Rs 5,000 crore.
“Blockage of MEIS is also a matter of serious concern for the exporting community,” said Mahesh Desai, chairman, EEPC India. This scheme was extended in March and it was on that basis that exporters had priced their products from April. However, suddenly on July 23, 2020, the DGFT website blocked the uploading of shipping bill.
“The sudden imposition of a cap of Rs 2 Crore per IEC on MEIS benefit of exports made during the period is going to seriously affect exporters whose numbers may not be very large, but their contribution to exports warrant a revisit to the imposition of cap,” Saraf said.
“This would create an uncertainty as that means that it can be withdrawn even earlier than December 21, 2020,” Bhuvnesh Seth, Vice Chairman, Exports Promotion Council for EOUs and SEZs said.
With the help of MEIS, government provides duty benefits depending of product and country. Rewards under the scheme are payable as percentage of realized free-on-board value (2%, 3% and 5%). MEIS duty credit script is transferable or use it for payment of number of duties. Moreover, exporters are urging the GOI to extend MEIS till March 31, 2021, with current Foreign Trade Policy.