- In the backdrop of the continued challenging global environment being faced by Indian exporters, Department of Commerce has extended support to certain new products and enhanced the rate of incentives for certain other specified products under the Merchandise Exports from India Scheme (MEIS). This has been implemented through DGFT public Notice No 32 dated 22.09.2016.
- The following are the major highlights of the support:-
Addition of new products –
- 2901 additional products falling under different product categories have been added. These include items in the following areas:
- Many items of traditional medicines like Ashwagandha herbs and its extracts, other herbs, extracts of different items.
- Certain marine products, sea feed items.
- Onion dried, processed cereal products and other value added items of plastics, lather articles, suitcases etc
- Industrial products under different categories, including engineering goods, fabrics, garments, chemicals, ceramics, glass products, leather goods, newspapers, periodicals, silk items, made ups, wool products, tubes, pipes etc.
Increase in MEIS rates –
- Rates of 575 product items falling under 11 products categories have been increased. These product include products of iron and steel, handicrafts, moulded and extruded goods, rubber, ceramic, glass, auto tyres and tubes, industrial machinery engineering items, IC Engines, machine tools / parts, items of wood, paper, stationary, footwear, auto seats, steel furniture, prefabs, items under the category of butter, ghee and cheese, dried egg albumin and rubber products
- With this the total number of items covered under the scheme has been increased from 5012 to 7103. The total support extended by Government of India under the scheme has been enhanced from the present Rs 22,000 crore to Rs 23,500 crore per annum.
About “Merchandise Export from India Scheme “
The Government of India has introduced Merchandise Exports from India Scheme (MEIS) through the Foreign Trade Policy (FTP) 2015-20 w.e.f. April 1, 2015. It seeks to promote export of notified goods manufactured/ produced in India. MEIS is a major export promotion scheme of GOI implemented by the Ministry of Commerce and Industry.
Salient features of MEIS are as under :
- i) MEIS is result of major consolidation and simplification:
- Earlier there were 5 different schemes for rewarding merchandise exports with different kinds of duty scrips with varying conditions attached to their use. Now all these schemes have been merged into a single scheme, namely Merchandise Exports from India Scheme (MEIS).
- ii) MEIS incentive Rates :
- Rewards under MEIS are payable as a percentage ( 2, 3 or 5% ) of realized FOB value of covered exports, by way of the MEIS duty credit scrip. The scrip can be transferred or used for payment of a number of duties/taxes including the customs / excise duty / service tax. Scrips and inputs imported under the scrips are fully transferable. This has provided much flexibility to exporters. Earlier schemes had many conditions attached with the scrips about their usage and importability of items.
iii) Allocation and Product Coverage:
- At the time of introduction on April 1, 2015, MEIS covered 4914 tariff lines. The product and market coverage was worked out keeping in view the annual allocation of Rs 18000 Crore by Department of Revenue. In light of the major challenges being faced by Indian exporters in the backdrop of the global economic slowdown, Department of Commerce introduced increased support for export of various products and included some additional items under the Merchandise Exports from India Scheme (MEIS) through Public Notice 44 issued on 29th October, 2015. MEIS currently incentives total 5012 tariff lines. This enhanced the estimated allocation to Rs. 21,000 Crore. Thereafter, as a measure of ease of doing business and to reduce transaction cost, the requirement of landing certificate for claiming MEIS has been dispensed with by giving global coverage to 2787 lines which did not have such coverage earlier, vide Public Notice No. 6/2015-20 dated 4.5.2016, which raised the envisaged allocation to Rs. 22000/- Crore per annum.
- iv) Duty credit scrips are freely transferable and usable for payment of custom duty, excise duty and service tax
All scrips issued under MEIS and the goods imported against these scrips fully transferable.
- v) Incentives to be available for SEZs
Incentives under MEIS are available to units located in SEZs also.
The reward/incentives provided by the Government makes the exporters competitive in the international market including Europe, The United States of America and Africa. These three markets are covered under the scheme for all notified 5012 tariff lines.