FinMin Allocates Rs 39,097 Crore for MEIS Benefits for 2019-20; Rs 15,555 Crore for Apr-Dec 2020
New Delhi: Giving relief to exporters, the finance ministry has approved allocation of Rs 39,097 crore under the incentive scheme MEIS for exports during 2019-20, according to an office memorandum. A total of Rs 15,555 crore was also allocated for MEIS (Merchandise Exports from India Scheme) benefits for exports made during the period April 1, 2020 to December 31, 2020, the office memorandum of the Department of Revenue said. It added that keeping in mind the “ongoing stress on Customs revenues”, it is suggested to limit the issuance of MEIS duty credit scrips in this financial year.
Accordingly, the Director General of Foreign Trade (DGFT) is requested to issue the scrips up to a total value of Rs 16,000 crore in 2020-21. Issuance of remaining scrips may be spread over the subsequent financial years through an appropriate mechanism, it said. “It is to inform that the competent authority has approved the allocation of an amount of Rs 39,097 crore for MEIS benefits for exports made during 2019-20. “Further, allocation totaling Rs 15,555 crore for MEIS benefits for exports made during the period April 1, 2020 to December 31, 2020 is conveyed with the approval of the competent authority,” it said.
It also asked to ensure that these allocations are utilised for issuance of duty scrips only for exports made during the respective periods, that is, Rs 39,097 crore for 2019-20, Rs 10,555 crore for the period April 1, 2020 to August 31, 2020 and Rs 5,000 crore for the period September 1, 2020 to December 31, 2020. “To ensure that MEIS allocations for 2019-20 and for 2020-21 (April-December, 2020) are not exceeded, DGFT should review the MEIS outgo periodically and share scrip issuance data on a regular basis with this department,” it added. Under MEIS, the government provides duty benefits depending on product and country. Rewards under the scheme are payable as a percentage of realised free-on-board value and MEIS duty credit scrip can be transferred or used for payment of a number of duties, including the basic customs duty.
The MEIS, introduced in April 2015, will be wound up by December 31, 2020. The government has already announced the Remission of Duty or Taxes on Export Products (RoDTEP) scheme to replace MEIS. Under RoDTEP, the remission of embedded taxes and other levies on exports shall be allowed. Hailing the allocations, Federation of Indian Export Organisations (FIEO) said “this has come as a major relief to liquidity hit exporters particularly from MSME. Quick release will ease out the interest burden on exporters who borrowed due to stuck up of MEIS benefits.”