UPSC Articles
Capping of MEIS Scheme Benefits
Part of: GS Prelims and GS-III- Economy; Import and Export
In news
- The Central government has taken a decision to cap export incentives under Merchandise Exports from India Scheme (MEIS) at Rs. 2 crore per exporter on outbound shipments made during September-December, 2020.
Key takeaways
- The ceiling would be subject to a downward revision to ensure that the total claim doesn’t exceed the allocated Rs. 5,000 crore for the period.
- The new Import Export Code (IEC) obtained on or after 1st September will be ineligible to submit any MEIS claim for exports.
- The Indian government has announced a new WTO-compliant scheme called Remission of Duties or Taxes On Export Product (RoDTEP) which will replace MEIS starting 1st January 2021.
Important value additions
Merchandise Exports from India Scheme (MEIS)
- It was introduced in the Foreign Trade Policy (FTP) 2015-20
- Objective: To offset infrastructural inefficiencies and associated costs involved in exporting goods/products which are produced /manufactured in India including products produced/manufactured by MSME Sector
Remission of Duties or Taxes On Export Product (RoDTEP)
- The new scheme is implemented from 1st January 2020.
- It creates a fully automated route for Input Tax Credit (ITC) in the GST to help increase exports in India.
- It will reimburse all the taxes/duties/levies being charged at the Central/State/Local level which are not currently refunded under any of the existing schemes but are incurred at the manufacturing and distribution process.
- The Ministry of Finance has set up a committee under the chairmanship of former commerce and home secretary GK Pillai to finalise the rates under RoDTEP.
