Merchandise Exports from Indian Scheme (MEIS)

1. INTRODUCTION

In the new Foreign Trade Policy-2015-2020, with effect from 1.4.2015, Merchandise Exports from Indian Scheme (MEIS) has been announced by the Government. It not only replaces five similar incentive schemes available under the Foreign Trade Policy 2009-2014, but it rationalize the incentives under the erstwhile Schemes, removes various kind of restrictions and significantly enlarge the scope of the earlier schemes. Unlike earlier Schemes, this scheme has been made applicable to exports made by SEZ units also.

Schemes replaced by MEIS are as under:-

• Focus Product Scheme (FPS)
• Market Linked Focus Product Scheme (MLFPS)
• Focus Market Scheme (FMS),
• Infrastructure Incentive Scrip (AIIS)
• Vishesh Krishi Gramin Udyog Yojana(VKGUY)

2. OBJECTIVE OF THE SCHEME

Objective of Merchandise Exports from India Scheme (MEIS) is to offset infrastructural inefficiencies and associated costs involved in export of goods/products, which are produced / manufactured in India, especially those having high exports intensity, employment potential and thereby enhancing India’s export Competitiveness.
This Scheme has been announced on 01.04.2015 under the New Foreign Trade Policy 2015-2020 and has come into effect from 01.04.2015 In other words; the rewards under the scheme are admissible for notified goods exported to notified markets on or after 1.4.2015

3. SALIENT FEATURES OF THE SCHEME AT A GLANCE

• Grants/rewards in the form of Duty Credit Scrip to the exporters on exports of notified goods, which have been produced/ manufactured in India.
• Rewards for exports of notified goods to notified markets payable as percentage of realized FOB value (in free foreign exchange).
• Exports of specified goods through courier or foreign post office using e-commerce of FOB value upto Rs.25000 per consignment being more than Rs.25000 per consignment being more than Rs. 25000/- benefit is limited on the value of Rs. 25000/- Only.
• Scrip itself and Goods imported/domestically procured against the scrip are freely transferable.
• Certain specified categories of exports or exports goods are not eligible for benefit under the Scheme.
• SEZ Units and EOU/STP/BTP/EHTP units not availing direction tax exemption also eligible for benefit under the Scheme.
• Scrip can be used for payment of (i) Customs Duties for import of inputs or goods, except items listed in Appendix 3A; (ii) Payment of excise duties on domestic procurement of services (iii) Payment of service tax on procurement of services as per DoR notification. (iv) Payment of Customs Duty and fee as per paragraph 3.18 of this Policy.
• No conditionality attached to the Scrip’s issued under the scheme.
• Different rates have been notified for different destination countries and different commodities.
• Destination countries divided into three groups- (i) Traditional Market, (ii) emerging & focus market; and (iii) other markets
• Exports commodity also categorized in different product group based on following criterion

• Highest Rewards for Agricultural and Village industry products; Value added and packaged Products; Eco-friendly and green products; Labor intensive Products and Products from potential winning sectors and Hi-tech Products.
• First time support provided to export of Fruits, Vegetables; Dairy Products, Oils meals, Ayush & Herbal Products, Paper, Paper Board Products.
• Global Support provided to Fruits, Flowers, vegetables; Tea Coffee, Spices; Cereals Preparation, shellac, Essential oils; Processed foods, Eco Friendly Products and Technical Textiles, Carpets Handmade; other Textile and Readymade garments supported market in the European Union, USA, Canada and Japan; Handicraft, Sports Goods and Furniture, Wood articles;
• Support to major markets given to Pharmaceuticals, Herbals, Surgical; Industrial Machinery, IC Engine, Machine tools, parts, Auto Components/Parts; Hand Tools, Pumps of All Types; Automobiles, Two Glass; Leathers garments, saddler items, footwear, steel furniture, preface, Lighters; wood, paper, Stationary; iron, steel, and base metals ,Products.
• Debits towards basic customs duty in the transferable reward duty credit scrip’s eligible for adjustment as duty drawback.
• Additional duty of customs/excise duty / service tax eligible for CENVAT credit or drawback.
• Remittances through Credit Card and other instruments for MEIS and SEIS
• CENVAT/Drawback

4. EXPORT CATEGORIES/SECTORS NOT ELIGIBLE FOR DUTY CREDIT SCRIP UNDER MEIS (REF: PARAGRAPH 3.06 OF FTP)

Para 3.06 of the Foreign Trade Policy Specified the exports categories/sectors which are ineligible for Duty Credit Scrip entitlement under MEIS. The ineligible export categories and sectors are as under:-

• EOUs / EHTPs / BTPs / STPs/ who are availing direct tax benefits/exemption.
• Supplies made from DTA units to SEZ units
• Exports of imported goods covered under paragraph 2.46 of FTP;
• Exports through trans-shipment, meaning thereby exports that are originating in third country but trans- shipped through India;
• Deemed Exports.
• SEZ/ EOU/ EHTP/BPT/ FTWZ products exported through DTA units;
• Items, Which are restricted or prohibited for export under Schedule-2 of Export Policy in ITC (HS), unless specifically notified in Appendix 3B.
• Service Export
• Red Sanders and beach sand.
• Export Products which are subject to Minimum export price or export duty.
• Diamond Gold, Silver, Platinum, other precious metal in any form including plain and studded jewellery and others precious and semi- precious stones.
• Ores and concentrates of all types and in all formations
• Cereals of all types.
• Sugar of all types and all forms.
• Crude/Petroleum oil and crude/primary and base products of all types and all formulations.
• Export of milk and milk products
• Export of meat and meat products
• Products wherein precious metal/diamond are used or Articles which are studded with precious stones.
• Exports made by units in FTWZ.

5. LIST OF ITEMS NOT ALLOWED FOR IMPORT/OR SCRIPS NOT BE USED FOR PAYMENT OF CUSTOMS DUTY ON THE FOLLOWING ITEMS (REF: APPENDIX-3A OF THE APPENDICES AND ANFS)

• Garlic, Peas and all other vegetables with a Duty of more than 30% under Chapter 7 of ITC (HS) Classification of Export and Import items.
• Coconut, Areca Nut, Orange, Lemon Fresh Grapes, Apple and Pears and all other fruits with a Duty of more than 30% under Chapter 8 of ITC (HS) Classification of Export and Import items.
• All Spices with a Duty of more than 30% under Chapter 9 of ITC (HS) Classification of Export and Import items.
• Tea, Coffee and Pepper as Per Chapter 9 of ITC(HS) Classification of Export and Import items.
• All Oil Seeds under Chapter 12 of ITC (HS) Classification of Export and Import items.
• Natural Rubber as per Chapter 40 of ITC (HS) Classification of Export and Import items.

Capital Goods

• General-Purpose agricultural tractors above 25 HP and upto 75 HP
• Stationary Diesel Engines
• Irrigation Pumps
• Threshers for cereals
• Combine harvesters suitable only for wheat and paddy crops
• Animals driven implements.