There is a lot of confusion regarding the validity of the MEIS scheme, What is the last date to claim? When is it going to be replaced? From which date it has been discontinued? Etc.

Exporters are worried because in these difficult situations they don’t want to lose any of the benefits that they are entitled to claim. This article will clear all your confusion and make it very easy for you to understand the withdrawal, extension & discontinuation of the MEIS scheme and most importantly what is the current news w.r.t MEIS Scheme. Also, we have separately included a section of the “MEIS Scheme for Textiles/Garment Industry”; since for them, the MEIS scheme was discontinued much earlier.

MEIS Scheme Validity

MEIS Scheme was introduced by the GOI under the Foreign Trade Policy 2015-20. It came into effect from 01^st April 2015 and was valid for a period of 5 years. (i.e. 31^st March 2020).

However, countries like the USA, China, Brazil objected to the MEIS scheme saying it is not WTO compliant and lodged a case against us.

MEIS Scheme Withdrawal

As per the WTO (World Trade Organization), a country cannot offer export subsidies like MEIS if it’s Per Capita Gross national income (GNI) is above $1000. India had crossed the GNI of $ 1000 for three years in a row i.e. 2014, 2015, and 2016.

Therefore, somewhere around 2019; India lost the case at WTO and decided to withdraw the MEIS Scheme by 31^st Dec 2019. MEIS was to be replaced by the new Remission of Duties or Taxes On Export Products (RoDTEP Scheme). The RoDTEP scheme intends to rebate all the indirect taxes levied on exporters and hence this kind of scheme was allowed as per WTO.

MEIS scheme was then extended till 31^st March 2020 because the rate of incentives under the new scheme was not decided yet.

Extension of MEIS Scheme

Due to the COVID-19 Pandemic; the existing Foreign Trade Policy (2015-20) was extended by one year. MEIS Scheme was also further extended till 31^st December 2020 with some conditions. They are:

As Per Latest Notification no. 30/2015-2020 Dated 1st September 2020

• MEIS Benefits granted to an IEC holder shall not exceed 2 Cr on the exports between 01.09.2020 to 31.12.2020.
• IEC holders who have not made any export between 01.09.2019 to 31.08.2020 would not be eligible to do an application under MEIS Scheme.
• IEC Obtained on or after 01.09.2020 would not be eligible to file for the benefits under MEIS Scheme for the exports made with effect from 01.09.2020.
• The DGFT may change the MEIS benefits cap to ensure that the total allocated claim under MEIS Scheme for the period 01.09.2020 to 31.12.2020 does not exceed the allocated amount by the Govt. of Rs 5000 Cr to issue the MEIS Scrip between the given Period.
• MEIS benefits shall not be available for the exports made with effect from 01.01.2021.

Discontinuation of MEIS Scheme

Therefore, as per the latest notification, the MEIS scheme is only available for shipments taking place up to 31^st December 2020; and it is discontinued from 01^st Jan 2021.

Note: It does not mean that after 31^st Dec you won’t be able to file an application under the MEIS scheme. All the previous shipping bills will be eligible for claim as per the late-cut policy.

MEIS Scheme for Textiles/Garment Industry

MEIS Scheme validity for Textiles/Garment Industry (Apparels & Made-ups) is a little different from other sectors. Find it’s explanation below with the help of a table:

Conclusion

Therefore, for all the sectors other than Chapter 61,62 & 63, below is the summary of the MEIS Scheme validity:

All the shipments made on or after 1^st Jan 2021, will be eligible for RoDTEP Scheme and all the shipments made before 1^st Jan 2021 will be eligible for the MEIS scheme.

MEIS benefits can be claimed backdated for the last 3 years as well, so if you have already exported and yet didn’t claim the MEIS benefits please get in touch with us now.

[To know more about the upcoming RoDTEP Scheme, like What are the duties & taxes going to be refunded under the scheme? Expected Incentive rates? Who all are eligible to claim? It's application procedure; Read our article here - RoDTEP Scheme]

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