Delay in transfer of export benefits suggests failure of automated system

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September 25, 2020 8:28 AM

In its report, the CAG has suggested that the Directorate General of Foreign Trade review the procedure of granting scrips under the Merchandise Export from India Scheme (MEIS) and the Services Export from India Scheme (SEIS), and lay down an appropriate checklist for issuing the scrips both electronically and manually.

The finance ministry will take the final call to impose the duty. 

The Comptroller and Auditor General of India has said “substantial delays” in issuing benefits under two key flagship schemes for goods & services exports indicate “failure of the automated system” in achieving the objective of simplification of procedures & ease of doing business.

In its report, the CAG has suggested that the Directorate General of Foreign Trade review the procedure of granting scrips under the Merchandise Export from India Scheme (MEIS) and the Services Export from India Scheme (SEIS), and lay down an appropriate checklist for issuing the scrips both electronically and manually. The CAG said the total amounts forgone in issuing the scrips under the export schemes — mainly the MEIS and SEIS — went up from Rs 19,031 in FY15 to Rs 44,305 in FY19.

The benefits under the MEIS rose from Rs 31,375 crore in FY16 to Rs 39,298 crore in FY19, while those under the SEIS went up from Rs 561 crore to Rs 4,263 crore in FY19, it added.

The report lends some credence to exporters’ claims that benefits are frequently held up, defeating the very purpose of export promotion. Apart from delays, the audit findings brought to the fore at least five issues about the MEIS: discrepancies between scrip value and actual entitlement; incorrect adoption of foreign exchange rates; incorrect levy of “late cut”; grant of benefits on export proceeds realised in rupee; and delay in the operationalisation of e-commerce module.

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