The Government caps Merchandise Exports from India Scheme (MEIS) benefits for exporters at Rs. 2 crore on shipments between 1 September and 31 December. Notably, MEIS is withdrawn against the exports made from 1 January 2021.
DGFT has issued notification in this regard which says that MEIS incentive against exports made between 1 September 2020 and 31 December 2020 is limited to Rs. 2 crore per IEC (Import-Export Code) subject to following additional conditions like no MEIS incentive for exporters registered for IEC after 1 September 2020 (period based on Let Export Order (LEO) date of shipping bills).
The MEIS incentive may be subject to downward revision of the incentives claimed by the exporters crossing allocated budget of Rs. 5,000 crore. There will be no incentive for exporters didn’t export during one year preceding 1 September 2020.
Apparel exporters are not happy with this decision and believe that this cap is very limited, especially in the current challenging scenario; Government should have more fund to support them.
It is pertinent to mention here that this announcement was made after the Department of Revenue asked the Commerce Ministry to review the coverage of MEIS so that the fiscal benefits under the programme can be brought down to Rs. 9,000 crore in the current financial year.
Commerce & Industry Minister Piyush Goyal has said that 98 per cent of exporters especially MSMEs will benefit under MEIS with reward cap of Rs. 2 crore/IEC from 1 September to 31 December 2020. This will remove uncertainty and protect genuine exporters while ensuring Make in India-Make for the world.
98% of exporters esp MSMEs will benefit under Merchandise Exports from India Scheme (MEIS) with reward cap of Rs. 2 Cr/ Importer Exporter Code from 1st Sep to 31 Dec 2020. This will remove uncertainty & protect genuine exporters while ensuring Make in India-Make for the World. pic.twitter.com/m06OeSxw6k
— Piyush Goyal (@PiyushGoyal) September 1, 2020
Started in April 2015, MEIS will wind up by 31 December 2020, and is replaced by Remission of Duty or Taxes on Export Products (RoDTEP) scheme.