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MAJOR CHANGES IN MEIS AND SEIS SCHEME DURING PAST ONE YEAR

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MAJOR CHANGES IN MEIS AND SEIS SCHEME DURING PAST ONE YEAR
Ashutosh Nath By: Ashutosh Nath
April 16, 2019
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  • Contents

Merchandise Export from India Scheme (‘MEIS’) and Services Export from India Scheme (‘SEIS’) are two flagship reward programs under the Foreign Trade Policy 2015-2020. These programs were launched with a view to promote the export of goods and services from India.

The process prescribed initially at the time of introduction of MEIS’ and SEIS’ under the Foreign Trade Policy 2015-2020 has undergone various changes. Majority of the changes made in the process are to promote the government’s motto of “ease of doing business”.

The summary of various changes made during the past year in MEIS and SEIS schemes including processes are as follows:

  1. Introduction of procedure to obtain ‘No Incentive Certificate’ under MEIS – Public Notice No. 17/ 2015-2020 dated 03 July 2018
  1. Chapter 3 of the Foreign Trade Policy 2015-2020 provides that an exporter will become eligible to obtain the MEIS scrip on the export of notified goods and Chapter 3 of Handbook of Procedures 2015-2020 prescribes the procedures which are required to be followed by applicants who intend to claim benefit under MEIS.
  2. It has been a frequent case that the previously exported MEIS eligible goods are re-imported into India for various reasons such as being defective, etc. To tackle and lay down the procedure under MEIS scheme for such situations, a new para 3.24 has been inserted in Chapter 3 of HBP 2015-2020 which exporters shall follow to obtain “N0 Incentive Certificate under MEIS” in case of re-import of goods.
  3. In this case, if the applicant of No Incentive Certificate has utilised the MEIS scrip obtained from the export of re-imported goods, then it shall refund the specified amount along with interest under Section 28AA of the Customs Act, 1962. However, if no utilisation has been made, then the applicant shall surrender the scrip to the Regional Authority.
  1. Change in value limit and eligibility criteria for MEIS on exports made through courier/ post – Notification No. 22/ 2015-2020 dated 26 July 2018
  1. The upper-value limit for MEIS in case of export of goods (as notified in Appendix 3C) through courier/ foreign post offices has been increased from INR 25,000 to INR 5,00,000 per consignment. However, if the value of exports, is more than INR 5,00,000 per consignment, then MEIS reward would be calculated based on FOB Value of INR 5,00,000 only.
  2. Further, the limitation on the port of export in case of export through courier/ post for the purpose of MEIS has been done away with. Now, exporters can export from any port across India.
  1. Mandatory recording of information on DGFT website about the transfer of MEIS/ SEIS scrips – Trade Notice No. 42/ 2015-2020 dated 11 January 2019

DGFT has notified that the transferor of MEIS and SEIS scrips (for EDI ports only), issued on or after 14 January 2019, shall have to record the details of the transferee on the DGFT website. The transferee will be able to utilise the scrip for duty payment only after the details are recorded on the DGFT website.

  1. Online filing, processing and system based approval of MEIS applications in respect of SEZ shipping bills – Trade Notice No. 51/ 2018-19 dated 29 March  2019
  1. Online system for filing, processing and system based approval of MEIS applications in respect of SEZ shipping bills has been introduced from 08 April 2019. This is similar to the process currently being followed for non-SEZ port shipping bills.
  1. Under the new process, the system will approve MEIS applications based on shipping bills attached to the applications. Also, under the new process, SEZ authorities will have to dispatch / handover scrips within one day of such approval.
  1. Discontinuation of the issue of a physical copy of MEIS/ SEIS scrips for EDI ports – Trade Notice No. 03/ 2015-2020 and Public Notice No. 84/ 2015-2020, both dated 03 April 2019
  1. The process of issuance of a physical copy of MEIS/ SEIS scrips for EDI ports has been done away with effect from 10 April 2019. However, the application process for the scrips shall still be made as per the current procedure.
  1. Under the new system, on the issuance of the scrip, a message will be sent to the mobile number and the email address (as indicated in the MEIS/ SEIS application module) of the applicant. Post issuance of the scrip, the applicant will be able to print/ save the scrip from the DGFT website.
  1. Also, no TRA facility will be available for MEIS/ SEIS scrips issued w.e.f. 10 April 2019 from EDI to non-EDI locations.
  1. Clarificatory amendment in eligibility criteria for SEIS - Notification No. 08/2015-2020 dated 24 May 2018
  1. Earlier, service providers (other than individuals) were required to have net foreign earnings ('NFE') of USD 15,000 /- and individual service providers to have NFE of USD 10,000 /- in the preceding financial year to be eligible to claim benefit under SEIS.
  2. However, post this notification, to become eligible under SEIS, service providers shall be required to have abovementioned NFE in the year of rendering service.

On observing the actions of the Central Government and the DGFT, it can be fairly commented that to promote the ease of doing business, automation of the process has been a significant focus in the past one year.

This article is co-authored by Mr Ayush Jha. He is a consultant at Tradewin India.

 

By: Ashutosh Nath - April 16, 2019

 

 

 

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