Incentive Schemes are equated to Power Boosters

Quick Introduction:

Merchandise Exports from India Scheme (MEIS) was introduced in the Foreign Trade Policy (FTP) 2015-2020. The said policy was categorised predominantly as an incentive scheme for the export of goods under Chapter 3 (Exports from India Schemes).

The rewards under the said scheme was given in the form of duty credit scrips to the respective exporters. The said scheme was duly notified by the Directorate General of Foreign Trade (DGFT) and successfully implemented.

Eligible goods are listed in Appendix 3B – Table 2 (MEIS Schedule).

Recent Changes which has positive effects on the aforesaid scheme:

Recently, Ministry of Commerce and Industry, Director General of Foreign Trade (DGFT) has released a Trade Notice.No.03/2020-21 dated April 15, 2020, wherein they have clarified on the manner of continuation of MEIS.

Earlier, DGFT vide its Notification No. 57/2015-20 dated March 31, 2020 made a significant amendment which extended the Current Foreign Trade Policy 2015-2020 to one more precious year i.e. till March 31, 2021 (Actual Policy Closure date was March 31, 2020).

Subsequently, the DGFT vide its Public Notice.No.67/2015-2020 dated March 31, 2020 which gave corresponding effects in amending various paras under Handbook of Procedures (HBP), 2015-20.

Analysis of Trade Notice.No.03/2020-21 dated April 15, 2020 on the perspective of MEIS Scheme

Greenlight to all benefits under MEIS for all the eligible items/ tarrif line/HS Code listed in Appendix 3B Table 2 (MEIS Schedule) till December 31, 2020 which provides major relief to all the exporter of goods whose goods fall under the eligible bucket of MEIS schedule. However, the said benefits would be ineligible for various cases where eligible goods under MEIS gets notified for benefits under Remission of Duties and Taxes on Export Products (RoDTEP)Scheme. We can understand that there emerges a new scheme called RoDTEP post deadline date provided currently i.e. December 31, 2020    .

They Also clarified that the detailed operational framework for the aforesaid new scheme would be notified separately.

We can understand the aforesaid clarification based on the below illustration: 

Let us assume Mr. A is Exporting Goods covered under ITC (HS) 08021100 (Almonds Frsh Or Dried in Shell), Currently the said exporter can claim the benefits under the MEIS Scheme. However, If the said goods gets notified under the upcoming RoDTEP then Mr. A cannot apply for MEIS Scheme.  

Conclusion: We can understand that the said extension was provided due to the current difficulties faced by all the exporters on account of COVID-19 outbreak and same can be linked to Major Supportive Relief Packets (MSRP).

Disclaimer- The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. Before making any decision or taking any action that might affect your personal finances or business, you should consult a qualified professional adviser. Copying and sharing of the material without prior permission is restricted.

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May 2021