As the new Remission of Duties or Taxes on Export Products (RoDTEP) scheme is not yet ready for all sectors, the Government may decide to extend the popular Merchandise Export from India Scheme (MEIS) for exporters by another 3 months.
The Government had fixed a timeline of doing away with the MEIS by 31 December 2020, and introducing the new RoDTEP scheme on 1 January 2021.
As per media reports, the rates under the new RoDTEP scheme are being worked out for a handful of products at a time. Since it is a labourious process, it is taking time.
The Government is, therefore, weighing the option of extending the MEIS scheme till the end of the on-going fiscal so that the RoDTEP committee has some more time to work out the rates.
The RoDTEP committee, under former home and commerce secretary GK Pillai, has sought evidence and data from the industry to justify their claim of the benefit needed to be given under the proposed tax neutralisation.
The apparel export sector has suggested 6 to 6.5 per cent RoDTEP rate. The industry believes that not all sectors may get the benefits immediately.
The MEIS is being withdrawn by the Government as a dispute settlement panel at the World Trade Organisation (WTO) ruled against it following a complaint by the US.
The new 5-year Foreign Trade Policy is to be implemented from 1 April 2021 and it is believed that introducing the RoDTEP at that time could be a good idea.