India: The ministry has rolled back the incentives under the MEIS under which the government provides duty benefits depending on product and country. Rewards under the scheme are payable as percentage of realised free-on-board value and MEIS duty credit scrips can be transferred or used for payment of a number of duties, including the basic customs duty.
NEW DELHI: The government on Thursday said it has rolled back duty incentives to apparel and made-ups exports under the Merchandise Export from India Scheme (MEIS) due to the introduction of taxes and levies rebate scheme Rebate of State and Central Taxes and Levies (RoSCTL).
“On account of introduction of RoSCTL, MEIS for items of the apparel and madeups sector for exports made with effect from March 7, 2019 stands withdrawn,” Directorate General of Foreign Trade (DGFT) said in a public notice.
RoSCTL announced on March 7, 2019 was in addition to the MEIS benefits available to the industry at the rate of 4%. While MEIS was given for infrastructural and logistics cost disadvantage and RoSCTL was offered for embedded state and central duties and taxes that are not refunded through goods and services tax.
The ministry has rolled back the incentives under the MEIS under which the government provides duty benefits depending on product and country. Rewards under the scheme are payable as percentage of realised free-on-board value and MEIS duty credit scrips can be transferred or used for payment of a number of duties, including the basic customs duty.
MEIS is inconsistent with the global trade rules of the World Trade Organization.
Exporters said while the move gives clarity on the status of incentives, it will make exports less competitive as on certain products like T-shirts, the overall incentive will decline from around 7.8% to around 6%.
“This gives clarity that exporters can file only one claim. There was no clarity earlier,” said Ajay Sahai, director general, Federation of Indian Export Organisations.
A Delhi-based exporter of apparel said that the move will take industry backwards and make it less competitive as the overall incentive is lower than before.
The directorate has also laid out a detailed procedure to avail benefits under the RoSCTL scheme. An application for claiming rebate under this scheme shall be filed online using digital signature on DGFT''''s website, it said.
"The relevant shipping bills shall be linked with the online application by the exporter. A maximum of 50 shipping bills would be allowed to be attached in one single application by the exporter in the online module," it added.
Source: The Economic Times, India Saturday, 01 February 2020