Govt caps export sops under MEIS at Rs 9,000 crore for April-December

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July 28, 2020 8:40 AM

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MEIS, commerce ministry, piyush goyal, Nirmala Sitharaman, export sops, CBIC, RoDTEP, gst, gst in exports, exportersIn FY19, the outgo under the MEIS was to the tune of Rs 40,000 crore.

The revenue-starved finance ministry has asked the commerce ministry to limit benefits under the flagship Merchandise Exports from India Scheme (MEIS) at just Rs 9,000 crore for the April-December period of FY21, prompting it to block the online MEIS module for exporters to apply for such incentives from July 23.

Commerce and industry minister Piyush Goyal wrote a letter to finance minister Nirmala Sitharaman on July 21 to reconsider the revenue department’s decision. Unless the issue is resolved fast, the decision would further hurt exporters as they struggle to cope with the impact of the pandemic and a wide-scale cancellation of orders. In FY19, the outgo under the MEIS was to the tune of Rs 40,000 crore.

In an office memorandum on Monday, deputy director general of foreign trade Praveen Kumar told Nitish Kumar Sinha, joint secretary at the revenue department, that MEIS scrips worth Rs 422.4 crore have already been issued to exporters for shipping bills with the so-called “let export order” (LEO) since April 1. “Since allocated funds at this stage for MEIS for FY2020-21 (up to December) stand at Rs 9,000 crore and any additional allocation has not been conveyed by the DoR (department of revenue), the online MEIS module has been blocked on July 23, from accepting new application for shipping bills with LEO dated April 1 onwards to limit the issuance of any more scrips.”

“DoR/CBIC (Central Board of Indirect Taxes and Customs) may take steps in such a situation and ask customs ports/field formations to stop registration of MEIS scrips with shipping bills with LEO date of April 1 and beyond,” the deputy DGFT said in the memorandum. For its part, the revenue deparment has asked its commerce counterpart to review the MEIS rates and coverage so that the allocation doesn’t exceed Rs 9,000 crore.

The MEIS would remain valid until December this year and was to be replaced with a more WTO-compartible scheme, RoDTEP, which reimburses all levies (that are not subsumed by GST) paid on inputs consumed in exports.

 

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