Home / General / Capping MEIS Benefits at Rs 2 Cr To Seriously Affect Exporters, Says FIEO; Seeks Immediate Review

Capping MEIS Benefits at Rs 2 Cr To Seriously Affect Exporters, Says FIEO; Seeks Immediate Review

FIEO President, Mr Sharad Kumar Saraf

New Delhi:

Port Wings News Network:

Welcoming the Notification No. 30 dated 1st September, 2020, Mr Sharad Kumar Saraf, President, FIEO said that it will help in resolving the impasses, resulting in blockage of MEIS benefits from 1st April 2020 and would provide huge relief to majority of exporters and give them stable policy environment for exports.

However, the sudden imposition of a cap of Rs 2 Crore per IEC, on MEIS benefit of exports made during 01 September 2020 to 31 December 2020, is going to seriously affect exporters, whose numbers may not be very large, but their contribution to exports warrant a revisit to the imposition of cap.

President FIEO said that the exports which will be made during September-December, 2020 are based on the orders, which have already been negotiated much earlier factoring the existing MEIS benefit. These benefits are part of the export competitiveness and therefore the sudden change will affect the exporters’ financially as buyers are not going to revise their prices upward.

FIEO expressed its concern over the financial outlay of Rs 5,000 Crore given for exports during September-December 2020 with the condition that if claims exceed Rs 5,000 Crore, the ceiling may further be revised downwards. This will create huge uncertainty as those eligible for cap of Rs 2 Crore will not be able to factor even such benefits in their exports. A clarity is also required whether any change in the MEIS rate will be notified for those who are not affected by the cap, if the amount of Rs 5,000 Crore is exhausted.

FIEO also urged the Government to extend the MEIS Scheme till 31st March, 2021, coterminous with the existing Foreign Trade Policy. The RoDTEP Committee has started the work but Industry is facing challenges in providing the data due to frequent local lockdowns, non-availability of transport and non-functioning of auditors. Moreover, fixation of rate for over 10,000 items at 8 digits would be a time consuming exercise, particularly as it has to meet the discipline of WTO, observed Mr Saraf. The extension in the MEIS Scheme till 31st March, 2021 will help in a smooth rolling of the RoDTEP Scheme as well since the Scheme is going to stay for zero rating of exports.

President FIEO also urged the Government that since the issue of the past has been sorted out, Government may

(i)  Open the facility for filing of MEIS claims for exports made from 1st of April, 2020;

(ii). Release RoSCTL benefit for exporters of Chapter 61, 62 and 63, which are pending; and

(iii). Announce SEIS benefits to Service exporters for the financial year 2019-20 and notify the scheme for 2020-21.

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