MEIS is one of the Exports from India Scheme launched by DGFT in Chapter 3 of Free Trade Policy 2015-20. This scheme aims to incentivize merchandise exporters of India.
1. Objective of the MEIS scheme:
The objective of MEIS is to offset infrastructural inefficiencies and associated costs involved in export of goods/products, which are produced/manufactured in India, especially those having high export intensity, employment potential and thereby enhancing India’s export competitiveness.
2. Rewards under the MEIS scheme:
The rewards under the scheme are given in the form of Duty Credit Scrips. Such Duty Credit Scrips and goods imported / domestically procured against them shall be freely transferable. (Duty Credit Scrips is a scrip issued by the DGFT and can be used to pay various duties/taxes to the Central Govt.)
The Duty Credit Scrips can be used for:
- Payment of Customs Duties for import of inputs or goods
- Safeguard Duty
- Anti-Dumping Duty
- Payment of Customs Duty and fee as per paragraph 3.18 of Foreign Trade Policy 2015-20.
3. Facility for Split Scrips
- On request, split certificates of Duty Credit Scrip subject to a minimum of Rs. 5 Lakh each and multiples thereof may also be issued, at the time of application.
- Once Duty Credit Scrip has been issued, request for splits can be permitted with same port of registration as appearing on the original Scrip. The above procedure shall be applicable only in respect of EDI enabled ports.
- In case of export through non-EDI ports, the facility of splits shall not be allowed after issue of Scrip.
4. MEIS Validity period and Revalidation
- Duty Credit Scrip issued on or after 01.01.2016 shall be valid for a period of 24 months from the date of issue and must be valid on the date on which actual debit of duty is made.
- Revalidation of Duty Credit Scrip shall not be permitted unless validity has expired while in custody of Customs Authority / RA / Government Authority.
5. Entitlement under MEIS:
Exports of notified goods/products with ITC[HS] code, to notified markets as listed in Appendix 3B, shall be rewarded under MEIS. Appendix 3B also lists the rate(s) of rewards on various notified products [ITC (HS) code wise].
The basis of calculation of reward would be on:
- realised Free on Board (FOB) value of exports in free foreign exchange, or
- on FOB value of exports as given in the Shipping Bills in free foreign exchange,
whichever is less, unless otherwise specified.
The rate of reward under the scheme varies from country to country and product to product. Destination countries have been classified as Group A, Group B and Group C under Appendix 3B as follows:
Country Group A -Austria, Belgium, Bulgaria, Canada and 26 other countries
Country Group B -Algeria, Angola, Antigua, Argentina and 135 other countries
Country Group C -Afghanistan, Albania, American Samoa and 66 other countries. Also, the countries not covered in Group A or Group B, shall be included in Group C.
Export of more than 4000 items are eligible to get benefit under MEIS. Rate of reward on various products under various ITC (HS) classifications have been given separately and it usually varies from 2% to 5%.
6. Ineligible categories under MEIS
The following exports categories /sectors shall be ineligible for Duty Credit Scrip entitlement under MEIS
- Supplies made from DTA units to SEZ units
- Export of imported goods covered under paragraph 2.46 of FTP;
- Exports through trans-shipment, meaning thereby exports that are originating in third country but trans-shipped through India;
- Deemed Exports;
- SEZ/EOU/EHTP/FTWZ products exported through DTA units;
- Export products which are subject to Minimum export price or export duty
- Exports made by units in Free Trade and Warehousing Zones (FTWZ).
7. Remittances through Credit Card and other instruments for MEIS.
Free Foreign Exchange earned through international credit cards and other instruments, as permitted by RBI shall also be taken into account for computation of value of exports.
8. Procedure to apply for rewards under MEIS:
- An application for claiming rewards under MEIS on exports shall be filed online, using digital signature, on DGFT website at ANF 3A.
- If application is filed for exports made through Electronic Data Interchange (EDI) ports, then hard copy of applications to DGFT, EDI shipping bills, electronic Bank Realisation Certificate (e-BRC) and RCMC are not required to be submitted. The applicant shall submit the proof of landing.
- In case application is filed for exports made through non EDI ports, then applicant need to submit export promotion copy of non EDI shipping bills alongwith the proof of landing. The applicant shall upload scanned copies of any other prescribed documents for claiming scrip. However applicant need not submit hard copy of applications to DGFT, electronic Bank Realisation Certificate (e-BRC) and RCMC in this case also.
- Applicant shall file separate application for each port of export.
- The documents which are not required to be submitted in original, shall be retained by the applicant for a period of 3 years from the date of issuance of scrip.
- Licensing Authority may call such documents in original at any time within 3 years. In case the applicant fails to submit the original documents on demand by Licensing Authority the applicant shall be liable to refund the rewards granted along with interest at the rate prescribed under Section 28AA of Customs Act 1962, from the date of issuance of scrip.
- Eligibility of product, corresponding ITC[HS] code, and markets (as given in Appendix 3B) for claiming rewards under MEIS shall as per Foreign Trade Procedures 2015-20.
However, for exports of goods through courier or foreign post offices using e- Commerce, a separate procedure has to be followed to claim rewards under MEIS.
9. Last date of filing of application for Duty Credit Scrips:
Application for obtaining Duty Credit Scrip under MEIS shall be filed within a period of:
- 12 months from the Let Export (LEO) date or
- 3 months from the date of:
- Uploading of EDI shipping bills onto the DGFT server by Customs.
- Printing/ release of shipping bills for Non EDI shipping bills.
whichever is later, in respect of shipments for which claim is being filed.
10. Applications for Export of goods through courier or foreign post offices using e-Commerce
Exports of goods through courier or foreign post office using e-commerce of Free On Board (FOB) value upto Rs. 25000 per consignment shall be entitled for rewards under MEIS. In case of FOB value more than Rs 25000 per consignment then MEIS reward would be limited to FOB value of Rs.25000 only. Such goods can be exported in manual mode through Foreign Post Offices at New Delhi, Mumbai and Chennai.
Procedure for application:
- Application shall be filed on line, using digital signature, in ANF 3D by exporter.
- The applicant shall submit express operator landing certificate/online web tracking print out indicating airway bill number as proof of landing.
- Applicant shall file separate application for each port of export.
- RA will manually examine the submitted documents before grant of scrip.
11. Port of Registration:
- Credit Scrip (including splits) under MEIS shall be issued with a single port of registration which shall be the port of export.
- Duty credit scrip needs to be registered at the port of exports prior to allowing usage of duty credit. Once registered at EDI port, scrip can be automatically used at any EDI port for import and at any manual port under Telegraphic Release Advise (TRA) procedure.
- In case port of registration is a manual port, TRA shall be required for imports at any other port.
12. Risk Management System:
- A Risk Management System shall be in operation whereby every month Computer system in DGFT Headquarters will select 10% of applications for each RA where scrips have already been issued. RA in turn may call for original documents in all such selected cases for further examination in detail. In case any discrepancy and/ or over claim is found on such examination, the applicant shall be under obligation to rectify such discrepancy and/or refund over claim in cash with interest. The original holder of scrip, however, may refund such over claim by surrendering the same scrip whether partially utilized or fully unutilized, without interest.
- Regional Authority may ask for original proof of landing certificate (wherever required under the policy), annexures attached to ANFs or any other document, which has been uploaded digitally or any other export related documents related to the application such as Export Invoices at any time within 3 years from the date of issue of scrip.
- Failure to submit such documents in original would make applicant liable to refund the reward granted along with interest from the date of issuance of scrip. It would be the responsibility of applicant to maintain such documents, certificate etc. for a period of at least three years from the date of issuance of scrips or the completion of scrutiny under RMS initiated by the RA whichever is later.
(The author of this article is a Practicing Company Secretary and can be reached at [email protected])
Disclaimer: The contents of this article are solely for informational purpose. It does not constitute professional advice or a formal recommendation. No part of this article should be distributed or copied without express written permission of the author.