Norms for claiming export benefits under MEIS eased

Merchandise exporters exempt from showing landing bills to claim benefits

The government, on Thursday relaxed the norms for claiming duty benefits under the Merchandise Exports from India scheme (MEIS) by exempting merchandise exporters from mandatory submission of landing bills with immediate effect.

With an eye on boosting exports which have declined for the 16th straight month in March, the Directorate General of Foreign Trade has notified that proof of landing, which exporters have long argued against, will not be required along the remaining 2787 tariff lines.

The MEIS scheme, introduced in April, 2015 under the Foreign Trade Policy incentivises merchandise exports along a total of 5,012 items currently. Exporters earn duty credits at fixed rates of 2 per cent, 3 per cent and 5 per cent depending upon the product and country.

However, the benefit of MEIS is available where the exporter presents proof of landing the goods at the destination country. Such proof is not necessary where MEIS is available for export to all countries but was mandatory for the 2787 tariff lines, incentives for which was available only to limited countries.

"Exporters currently pay around Rs 2000 per shipping bill to shipping companies," SC Ralhans, President of exporters body Federation of Indian Export Organisations (FIEO) said. He added that FIEO had taken up the issue of delay as well as cost with the Commerce ministry whereby exporters incur an estimated Rs 700 crore per year to obtain landing certificate.

A commerce ministry official said the move was in line with the government's aim of tackling the difficulties exporters have had with the MEIS. He added complaints have reached the ministry of ports not properly following the procedures related to MEIS, most of which he said were due to a lack of clarify about the procedures.

The annual resource allocation under MEIS was enhanced from Rs.18,000 crore to Rs. 21,000 crore in October 2015. The government had also raised the duty drawback rates by two per cent for many sectors including engineering, marine and textiles. The drawback rates are reimbursement of certain customs and excise duties, and service tax on imports of input materials, which go into the manufacture of goods that are exported.

With the 2015-16 financial year witnessing dismal merchandise trade, the government is betting big on services trade, sources in the ministry had said earlier. Weak global conditions like a crash in commodity prices, sluggish Chinese economy and tepid demand has seen India's merchandise trade get stuck at $ 261 bn for the last financial year.