MEIS Benefits Capped !!!
“It’s Not Prevention, But a Restriction”
Swift Introduction:
Merchandise Exports from India Scheme (MEIS) was introduced in the Foreign Trade Policy (FTP) 2015-2020. The said policy was considered as an incentive scheme for export of goods under Chapter 3 (Exports from India Schemes).
Recent update on the aforesaid scheme:
Recently, Ministry of Commerce and Industry, Director General of Foreign Trade (DGFT) has released a Notification No. 30/2015-20 dated September 01, 2020, wherein they have clarified on the ‘Ceiling/Cap on MEIS Benefits which are available to Exporters on exports made from September 01, 2020 to December 31, 2020’.
Earlier, there was a Trade Notice No. 03/2020-21 dated April 15, 2020 which gave greenlight to all benefits under MEIS for all the eligible items/ tariff line/HS Code listed in Appendix 3B Table 2 (MEIS Schedule) till December 31, 2020. Which also said that the detailed operational framework of New Scheme called Remission of Duties and Taxes on Export Products (RoDTEP) Scheme would be notified separately.
Currently, the Government has placed a cap on total reward to be granted to an IEC holder under the aforesaid scheme which shall not exceed Rs. 2 Crore per IEC Holder towards the exports made during the period September 01, 2020 to December 31, 2020 (based on the Let Export Order date (LEO) of the shipping bills).
Non-Eligibility
1. Any IEC holder who has not made any export with LEO during the period September 1, 2019 to August 31,2020
or
2. Any new IEC obtained on or after September 01,2020 would not be eligible to submit any claim under the said scheme towards exports made W.E.F September 01, 2020
(The aforesaid cap may be subject to further downward revision to ensure that the total claim under the said scheme for the period September 01, 2020 to December 31, 2020 does not exceed allocated funds i.e. Rs.5,000 Cr)
Further, MEIS Benefits shall not be available for exports made W.E.F January 01, 2021
(New Paras 3.04A & 3.04B are been inserted in FTP under Chapter 3)
Conclusion: It may be noted that there exists Budget Constraints and the same has resulted in Capping the MEIS Benefits. Government is also planning to place reduced restriction on allocation of funds towards Incentives / Benefits to fulfil the needs of all the exporters in this pandemic situation.
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CA Sai Raghavendra Sumanth T
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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