The Foreign Trade Policy of India (2015-2020) introduced the Merchandise Exports From India Scheme (MEIS). The key objective of the MEIS schemes is to furnish the exporters with rewards in the form of duty credit scrips. The foreign trade policy issues these duty credit scrips to enable exporters to pay customs duty. The primary objective of offering these incentives to exporters was to increase the flow of foreign exchange into India. The idea was to increase exports of notified goods manufactured in India. Some of the notified goods include cardamom, coffee, pepper, rubber iron and steel, timber, plywood and glass.
The Central Government of India consistently shares the details of this category of goods. The policy issues all the duty credit scrips under this scheme at different rates. The rates depend on the countries you export the goods and services. They could range between 2% and 10% of the FOB value of exported goods. The scrips, which are incentives, can be used for making payments towards different taxes like excise duty, customs duty, Goods and Service Tax and service tax.
Did you know?
The Government of India introduced the MEIS schemes to replace five other incentive schemes, operational between the years 2009-and 2014.
Background to MEIS:
The Foreign Trade Policy of India that prevailed between the years 2015 and 2020 included five varied schemes to incentivise exports of Indian manufactured goods and services. The scheme aimed at promoting the government’s vision of ‘Make in India’. The Ministry of Commerce and Industry was responsible for implementing this scheme. The Government of India allocated more than ₹20,000 crores for exports for this scheme.
The five schemes which the MEIS scheme replaced are:
- Focus product
- Focus market
- Market linked focus product
- Vishesh Krishi and Gram Udyog Yojana
- Agriculture infrastructure incentive scrip
The focus of the scheme revolved around all Indian products, which could generate more employment to boost the exports of India and make them on par with global products.
The Key Aspects of the MEIS Incentive
- The earlier five schemes which MEIS replaced included varying duty scrips. These came with specific conditions. All those conditions got consolidated into one scheme under MEIS.
- The incentives offered to the exporters are a percentage of the realised free on board value of the goods exported. These percentages could be 2,3 or 5, and exporters get them via a duty credit scrip. The MEIS uses these for making payments for various taxes like service tax and export duties like customs and excise.
- The total number of tariff lines that come under the domain of MEIS is 5012.
- You can transfer the duty credit scrips easily.
- These incentive scrips are also available to the units in the Special Economic Zones.
- Free Foreign Exchange – This includes foreign exchange earned by using international credit cards. It also includes foreign exchange made via other financial instruments approved by the Reserve Bank of India.
What is the Application Procedure to Obtain the MEIS Incentive?
You need specific documents to apply for the MEIS incentive. Below is the list of documents:
The Import Bill of Entry
The said importer will have to file this in the said geographical market. This bill should be self-attested.
Delivery Order Document
The port authorities issue this.
Notice Specifying Details of Arrival of Goods
The goods carrier issues this.
Report Specifying All Tracking Details
The good carrier issues this ( An agent with the requisite accreditation in India can also issue it).
All Transport Receipts
From the port of dispatch to the notified destination.
To prove that the said goods have arrived at the notified destination.
Procedure for Application
- Online Application – Fill in all the details on the ANF-3A form in the requested format along with a digital signature before submitting it.
- You also have to apply to the DGFT website. This is the website of the Directorate General of Foreign Trade.
- Every port of export requires an individual application.
- A single application can include shipping bills that total to Nos. 50.
- The Foreign Trade Policy has made it obligatory for a registration cum membership certificate (RCMC) for all exports. This certificate helps them to obtain the said benefits under MEIS.
Electronic Data Interchange (EDI) Port - If you make export activity through the EDI port, you do not submit the following documents:
- Application in a physical format.
- Shipping bill.
- Electronic Bank Realisation Certificate (e-BRC).
- RCMS (as mentioned above).
- However, you will have to submit proof of the goods arriving at the notified destination.
- In case you make an export activity through a non-EDI port, you have to submit all the relevant documents (original and scanned as specified) to claim your incentive scrip.
- You have to retain the original documents for three years (from the date you get the incentive scrips). The licencing authority has the right to ask for these during that time frame.
- If you cannot furnish the licencing authority with the original documents, you will hav to refund the incentive scrips you have availed. You will also have to pay the interest (as per the calculations of the said authority).
- You have to apply within 12 months - Starting from the Let Export (LEO) data.
- You can also apply within three months – Starting by uploading the electronic data interchange into the Directorate General of Foreign Trade server.
The Use of the MEIS Incentive
You can use the MEIS incentives provided in the form of duty credit scrips for payments toward:
- The imports of products
- Import of various inputs
- Custom duty
- Safeguard duty
- Anti-dumping duty
- You can transfer and use these duty credit scrips to import goods.
Goods Notified Under MEIS
Below are the details of goods that the MEIS scheme supports under the Foreign Trade Policy (2015-2020)
- Merchandise Goods: Spices, essential oils, fruits, vegetables, tea, coffee, processed foods.
- Eco-friendly Products: Jute products, coir, handlooms, handicrafts.
- Marine Products
- Textile (including readymade garments) for countries like Japan, Canada, the EU and the USA.
- Other products include pharmaceuticals, industrial machinery, chemicals, rubber, leather (garments included), wooden and steel furniture, ships, planes and two-wheelers (including bicycles).
- There are a host of other capital and consumer goods, and the details of each category the Government of India notifies of each category consistently.
Also Read: Guide to Merchant Exports under GST
Ineligibility of Benefits Under MEIS
Below are the categories of goods that do not qualify for benefits under the MEIS scheme:
- All the supplies are made from the domestic tariff area (an area that is outside the Special Economic Zone (SEZ) to the Special Economic Zone units.
- All types of cereals
- All types as well as forms of sugar
- Oil – Crude and petroleum
- Non-veg products – Meat and meat product varieties
- Metals – Gold, silver and semi-precious and precious stones
- Jewellery which includes precious or semi-precious stones or made of specific metals
- Free Trade Warehousing Zone – Exports made from this zone
- Different types of ores
- Goods that are manufactured in other countries but are shipped via India.
Duration of MEIS
The Government of India launched the MEIS scheme. It comes under the domain of the 2015-2020 Foreign Trade Policy of India. The various duty credit scrips offered as incentives under the MEIS scheme are applicable from the date of the launch of the MEIS, i.e. 1st April 2015 and are valid until 31st March 2020.
The contents of this article inform you about the MEIS schemes and their various benefits to exporters. The scheme indicates products that are eligible for incentives and products which do not qualify. The introduction of this scheme was to incentivise Indian exporters and make Indian exports competitive in world markets. However, this scheme was operational only until 31st March 2020 as it was non-compliant with the rules and regulations of the World Trade Organisation (WTO). The Remission of Duties and Taxes on Export Products (RoDTEP) replaced this scheme which came into effect on 1st January 2021. The government launched this scheme to increase the exports of goods that have not been doing very well.
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