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Export sops likely to continue till March, 2021 — Softening
the COVID-19 blow
India is likely to continue export incentives worth ` 40,000 crore till next
year as the Government looks to cushion the impact of COVID-19 on the coun-
try’s outward shipments.
The Commerce and Industry Ministry is considering a plan to extend the
Merchandise Exports from India Scheme (MEIS) till March 31, 2021. The proposal
was mentioned in a letter to Development Commissioners of Special Economic
Zones from the Department of Commerce. ET has reviewed the letter.
India’s exports shrank almost 35% to $ 21.41 billion in March from a year
earlier. They declined 4.8% to $ 314.31 billion in FY20 from $ 330.08 billion in
FY19.
“MEIS extension will bring predictability to exports pricing and on the
policy front. Exporters’ confidence will get a boost,” said Ajay Sahai, Director
General of the Federation of Indian Export Organisations.
The scheme was extended to December 31, 2020, the Government said
last month when it announced the extension of the extant Foreign Trade Policy
by a full financial year till March 31, 2021.
Under MEIS, the Government provides duty benefits, depending on the
product and the destination country. Rewards under the scheme are payable as a
percentage of the realised free-on-board value (of 2%, 3% and 5%) and the MEIS
duty credit scrips can be transferred or used to pay duties including Basic Cus-
toms Duty.
Exporters are estimated to have received benefits worth ` 35,000-40,000
crore under MEIS in FY19.
“Exporters would need financial support from the Government to stand
on their feet again... The Government has to decide whether extending or in-
creasing the MEIS rates is an option they would like to exercise,” said Pratik Jain,
National Leader, Indirect Tax, PwC.
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EXCISE LAW TIMES  15th May 2020  52