As the department of revenue (DoR) for April to December 2020 decided to limit the benefits under the scheme at Rs 9000 crore the commerce ministry blocked an online system for exporters to apply for availing tax incentives under the MEIS scheme from July 23. The Department of Revenue in May had conveyed that it may not be feasible MEIS allocation beyond Rs 9000 crore 2020-21. There had been a communication sent by commerce and industry minister Piyush Goyal to finance minister Nirmala Sitharaman on July 21.
It was on a request by the commerce department to its revenue counterpart to reconsider its decision, while according to the office memorandum the database for MEIS script insurance has been checked and found that on July 20 the scripters value Rs 422.4 crore had already issued to exporters for shipping bill with Let Export Order( LEO) since April 1 onwards. The online MEIS module has been blocked on July 23 from accepting new applications for shipping bills to limit the insurance of any more scripts, because of the MEIS for 2020-21 the allocated funds were at Rs 9000 crore and any additional allocations has not been conveyed by the department of revenue. In such a situation the DoR/CBIC ( Central Board Of Indirect Taxes and Customs) may take some steps and may ask to stop registration of MEIS script with shipping bills with LEO date of April 1 and beyond to the customs ports/ field formation. It is said by a depute DGFT in the memorandum.
The president of Federation of Indian Export Organizations (FIEO) SK Saraf said that the government’s interventions had been sought to resolve the issues as MEIS benefits are already factored by exporters in the prices and help in easing the liquidity of the exporters which has been impacted due to the widespread COVID-19 pandemic. Depending on the product and country under the MEIS, the government provides duties benefits. Under the scheme, rewards are payable as a percentage of realized free-own-board value. Including the basic customs duty, the MEIS duty credit scrip can be transferred or used for payment of several duties. For the Remission of Duties or Taxes on Export Product (RoDTEP) to replace MEIS, the government has already announced some schemes. The aim of (MEIS) Merchandise Exports from India’s Scheme is to make India’s product more competitive in the global market. This scheme provides the exporter incentives in the form of duty credit script to compensate for its loss on payment on duties.
