MERCHANDISE EXPORTS FROM INDIA SCHEME

[Mr. M. GOVINDARAJAN]

Chapter 3 of Foreign Trade Policy for the year 2015 – 2020  provides for exports schemes from India.  The objective of the scheme is to provide rewards to exporters to offset infrastructural inefficiencies and associated costs involved and to provide exporters a level playing field.   There are two schemes for exports-

• Merchandise Exports from India Scheme (MEIS);
• Service Exports from India Scheme (SEIS).

Under these two schemes duty credit scrips shall be granted as rewards.  The duty scredit scrips and goods imported/domestically procured against them shall be freely transferable. 

The duty credit scrips can be used for:

• Payment of customs duty for import of inputs or goods, except items listed in Appendix 3A;
• Payment of excise duty on domestic procurement of inputs or goods including capital goods as Department of Revenue Notification;
• Payment of service tax on procurement of services as per Department of Revenue notification;
• Payment of customs duty in case of Export obligation defaults for authorizations issued under Chapter 4 and 5 of this policy;
• Payment of composition fee under FTP;
• Payment of application fee under FTP, if any;
• Payment of value shortfall in export obligation under para 4.49 Hand Book of Procedures 2015-20.

 MEIS

Earlier there were five different schemes as detailed below:

• Focus Product Scheme;
• Market Linked Focus Product Scheme;
• Focus Market Scheme;
• Agri Infrastructure Incentive Scrip;
• Vishesh Krishi and Gram Udyog Yojana

for rewarding merchandise exports with varying conditions attached to their use.   Now all these schemes have been merged into a single scheme namely Merchandise Export from India Scheme and there would be no conditions attached to the scrips issued under this scheme.

The object of MEIS is to offset infrastructural inefficiencies and associated costs involved in export of goods/products, which are produced/manufactured in India, especially those having high export intensity, employment potential and thereby enhancing India’s export competitiveness.

Entitlement of MEIS

Exports of notified goods/products with ITC (HS) code, to notified markets as listed in Appendix 3B shall be rewarded under this scheme.  The said appendix also lists the rates of rewards on various notified products.   The basis of calculation of reward would be on realized FOB value of exports in free foreign exchange, or on FOB value of exports as given in the Shipping Bills in free foreign exchange, whichever is less, unless otherwise specified.

Exports of goods through courier or foreign post office using e-commerce, of FOB value upto ₹ 25000/- per consignment shall be entitled for rewards under MEIS.  If the value of exports using e-commerce is more than ₹ 25000/- per consignment then MEIS reward would be limited to FOB value of ₹ 25000/- only.

Ineligible categories under MEIS

The following exports categories shall be ineligible for duty credit script entitlement under MEIS:

• EOU/EHTP/BTP/STP who are availing direct tax benefits/exemption;
• Supplies made from DTA units to SEZ units;
• Export of imported goods covered under para 2.46 of FTP;
• Exports through trans-shipment;
• Deemed Exports;
• SEZ/EOU/EHTP/BPT/FTWZ products exported through DTA units;
• Items, which are restricted or prohibited for export under Schedule 2 of Export Policy in ITC, unless specifically notified in Appendix 3B;
• Service export;
• Red sandlers and beach sand;
• Export products which are subject to minimum export price or export duty;
• Diamond, gold, silver, platinum, other precious metal in any form including plain and studded jewellery and other  precious and semi-precious stones;
• Ores and concentrates of all types and in all formations;
• Cereals of all types;
• Sugar of all types and all forms;
• Crude/petroleum oil and crude/primary and base products of all types and all formulations;
• Export of milk and milk products;
• Export of meat and meat products;
• Products wherein precious metal/diamond are used or Articles which are studded with precious stones;
• Exports made by units in FTWZ (Free trade and warehousing zone);
• Items which are prohibited for export under Schedule 2  of Export Policy in ITC (HS).

Effective date

The date of effect of this scheme is 01.04.2015.

Special provisions

The following are the special provisions giving powers to the Government in respect of these schemes:

• Government reserves the right to specify export products or services or markets, which shall not be eligible for computation of entitlement of duty scrip;
• Government reserves the right to impose restriction/change the rate/ceiling on duty credit scrip;
• Government may notify goods in Appendix 3A which shall not be allowed for debiting through duty credit scripts in case of import;
• Government may prescribe value cap of any kind of a product or limit total reward per IEC holder at any time.

Transitional arrangement

For the goods exported or services rendered up to 31.03.2015 eligible under erstwhile Chapter 3 of the earlier FTP and scrip is applied/issued on or after 01.04.2015 against such export of goods or services rendered, the then prevailing policy and procedure regarding eligibility, entitlement, transferability, usage of scrip and any other condition in force at the time of export of goods or rendering of services, shall be applicable to such scrips.