MEIS Scheme is the Government Incentive scheme under which goods exporters can avail the benefits of 2% – 7% on FOB value of exports in the form of Duty Credit Scrip which is transferable in nature and can be sold in the open market at a discounted rate of the face value of scrip which can then be used for the waiver of various custom duties.
In May, the Department of Revenue(DoR) had conveyed that it may not be feasible to exceed MEIS allocation beyond Rs 9,000 crore for FY 2020-21 due to limited funds.
The DoR asked the Commerce and Industry Minister to check MEIS Incentive coverage so that benefits outgo remained within the allocated incentive amount in this period, hence the MEIS scrip issuance database was checked and it was found that as on July 20, Scrips of Rs 422.4 Crore had already been issued on the shipping bills having let export date from 1st April onwards,
For the FY 2020-21, the allocated funds stand at 9,000 Crore & any additional allocation has not been conveyed by the Department of Revenue, hence the DGFT has blocked the Online Module.
In a virtual event organized by the Confederation of Indian Industry, Mr. Piyush Goyal the commerce and industry minister said “We are in dialogue with the requisite authorities. MEIS is not going anywhere, It is a cash flow issue and we are trying for an early solution which is a win-win for everyone”, stating that the Covid-19 pandemic has had an impact on government finances too, the available resources are limited and have to be used optimally.
Mr. Goyal also has requested Finance Minister Nirmala Sitharaman to reconsider the decision to stick the allocation of Rs 9,000 crore for MEIS benefit. He also said that the Finance Minister is looking at ways to promote finance for investments in the country and they already have found 20 sectors.
India’s exports are almost 88% of the level in July 2019 and imports are almost 75% of the same period last year.
The Finance Minister and Niti Aayog have called for putting financial resources into new Production – Linked Incentive (PLI) schemes in select sectors with core competency and potential for exports instead of extending the Merchandise Exports of India Scheme (MEIS), which cost Rs 43,000 crore in 2019-20, Department of Revenue (DoR) argued against continuing the MEIS, calling it inefficient and wasteful.
Mr. Goyal also informed about launching the land bank portal through which 500,000 hectors of land will be made available to the Industry.
According to him, a labor law Regulations for the country is in works on the lines proposed by the UP Government. Almost 16 states have already sent proposals to the center on labor reforms.
The MEIS Scheme is soon to be replaced with the new Rebate of Duties & Taxes on Export Products (RoDTEP Scheme).