New Delhi: Various stakeholders including exporters, export councils and export federation have praised the government decision to extend the MEIS export incentives till 31st December 2020.
In a trade notice, the Directorate General of Foreign Trade (DGFT) has said, “it is clarified, without prejudice and subject to changes that may be deemed necessary in public interest from time to time that: benefits under MEIS for any item/tariff line/HS Code currently listed…will be available only up to December 31, this year”. It said that RoDTEP scheme was approved by the cabinet to replace the ongoing MEIS.
It also said that if rates for any item or product will be fixed under RoDTEP before December 31, 2020, those goods will not get MEIS benefits. Commenting on this, FIEO Director General Ajay Sahai said: “It has to put an end to validity of MEIS to December 31 this year. I am not sure whether government will be able to fix RoDTEP rate for all products by said date.”
Commenting upon the DGFT move Vikram Solar Managing Director Gyanesh Chaudhary said, “It will provide exporters a much needed breathing space as domestic sales will remain relatively low due to the pandemic faced by India.
“As we pass this pandemic, global supply chains are bound to re-align and India will have a good opportunity to promote its exports. DGFT is still in the process of finalizing the RoDTEP export incentives, and we would recommend that export incentive under RoDTEP should be increased substantially to boost Indian exports”, Mr Chaudhary added.
One big relief for exporters is the continuation of MEIS, which earns them cashable scrip against exports of identified items, and the EPCG scheme, under which capital goods for production of export goods can be imported duty-free.
Although the World Trade Organization has ruled that both the schemes should be replaced as such sops are against multilateral rules. MEIS will be gradually phased out and replaced with the new Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, as per a Cabinet discussion, but rates will be fixed after due consultations with stakeholders.