REWARD SCHEMES – MERCHANDISE EXPORTS FROM INDIA SCHEME (MEIS)
Article explains what is Reward Scheme, Objective of MEIS Scheme, Eligibility Criteria for MEIS Cheme, Reward under the MEIS scheme, Ineligible categories under MEIS, Entitlement under MEIS for Export of goods through courier or foreign post offices and Note to MEIS Scheme.
Very Simple analysis of MEIS is as under:-
Exports of a country play an important role in the economy. Government always endeavors to encourage exports by introducing various export promotion schemes. Consequently, there are various promotional measures under FTP and other schemes operated under Ministry of Commerce through various Export Promotion Councils.
Before going ahead to understand about various export promotion schemes provided under FTP, it is important to note that certain set of schemes provided under FTP are not compatible with WTO guidelines. As per Article 3.1 of the WTO’s SCM agreement, all developing countries with gross per capita of $1,000 per annum for three consecutive years are required to stop all export incentives.
In view of above, MEIS though being currently operational shall be phased out after 31.12.2020 and the new scheme – RoDTEP (Remission of Duties & Taxes on Export Product) would be made operational from 01.01.2021, as per the latest announcement by Ministry of Commerce & Industry.
Reward schemes are the schemes which entitle the exporters to duty credit scrips subject to various conditions.
Duty credit scrip shall be permitted to be utilized for payment of customs duty also in case of import of capital goods under lease financing. These scrips are freely transferable, i.e. they can be sold in market, if the holder of duty credit scrip does not intend to utilize the said scrip for payment of customs duties / fee as the case may be. Goods imported under the scrip are also freely transferable.
The objective of MEIS scheme is to promote the manufacture and export of notified goods/ products.
Exporter of goods i.e. Merchant exporter / Manufacturer exporter.
However, MEIS rewards can be claimed either by the supporting manufacturer (along with disclaimer from the company / firm who has realized the foreign exchange directly from overseas) or by the company/ firm who has realized the foreign exchange directly from overseas.
MEIS Reward shall be available for export of notified products at the specified rate (generally the reward rates are in the range of 2% to 7%)
The basis of calculation of reward would be:
whichever is less.
5. Ineligible categories under MEIS
Exports categories ineligible for Duty Credit Scrip entitlement under MEIS are listed below: