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International Exim Management Institute

Government Schemes- Exports/Imports


 

Merchandise Exports from India Scheme (MEIS)

 

Objective of Merchandise Exports from India Scheme (MEIS) as per Indian Foreign Trade Policy 2015-20 (FTP 2015-20) is to offset infrastructural inefficiencies and associated costs involved in export of goods/products, which are produced/manufactured in India, especially those having high export intensity, employment potential and thereby enhancing India’s export competitiveness.

 

Entitlement under MEIS

Exports of notified goods/products with ITC[HS] code, to notified markets as listed in Appendix 3B, shall be rewarded under MEIS. Appendix 3B also lists the rate(s) of rewards on various notified products [ITC (HS) code wise]. The basis of calculation of reward would be on realized FOB value of exports in free foreign exchange, or on FOB value of exports as given in the Shipping Bills in free foreign exchange, whichever is less, unless otherwise specified.

Export of goods through courier or foreign post offices using e-Commerce

(i) Exports of goods through courier or foreign post office using e-commerce, as notified in Appendix 3C, of FOB value up to Rs. 25000 per consignment shall be entitled for rewards under MEIS.

(ii) If the value of exports using e-commerce platform is more than Rs 25000 per consignment then MEIS reward would be limited to FOB value of Rs.25000 only.

(iii) Such goods can be exported in manual mode through Foreign Post Offices at New Delhi, Mumbai and Chennai.

(iv) Export of such goods under Courier Regulations shall be allowed manually on pilot basis through Airports at Delhi, Mumbai and Chennai as per appropriate amendments in regulations to be made by Department of Revenue. Department of Revenue shall fast track the implementation of EDI mode at courier terminals.

 

Ineligible categories under MEIS as per Import Export Policy 2015-2020 (FTP 2015-20)

The following exports categories /sectors shall be ineligible for Duty Credit Scrip entitlement under MEIS, EXIM Policy 2015-20 (FTP 2015-20).

(i) EOUs / EHTPs / BTPs/ STPs who are availing direct tax benefits / exemption.

(ii) Supplies made from DTA units to SEZ units

(iii) Export of imported goods covered under paragraph 2.46 of FTP;

(iv) Exports through trans-shipment, meaning thereby exports that are originating in third country but trans-shipped through India;

(v) Deemed Exports;

(vi) SEZ/EOU/EHTP/BPT/FTWZ products exported through DTA units;

(vii) Items, which are restricted or prohibited for export under Schedule-2 of Export Policy in ITC (HS), unless specifically notified in Appendix 3B.

(viii)Service Export.

(ix) Red sanders and beach sand.

(x) Export products which are subject to Minimum export price or export duty.

(xi) Diamond Gold, Silver, Platinum, other precious metal in any form including plain and studded jewellery and other precious and semi-precious stones.

(xii) Ores and concentrates of all types and in all formations.

(xiii) Cereals of all types.

(xiv) Sugar of all types and all forms.

(xv) Crude / petroleum oil and crude / primary and base products of all types and all formulations.

(xvi) Export of milk and milk products.

(xvii)Export of Meat and Meat Products.

(xviii)Products wherein precious metal/diamond are used or Articles which are studded with precious stones.

(xix) Exports made by units in FTWZ.

Effective date of scheme for MEIS as per Import Export Policy 2015-2020 (FTP 2015-20)

The schemes shall come into force with effect from the date of notification of this Policy, i.e. the rewards under MEIS shall be admissible for exports made on or after the date of notification of this Policy.

 

Special Provisions under IMPEX Policy 2015-20 (FTP 2015-20)

(a) Government reserves the right in public interest, to specify export products or services or markets, which shall not be eligible for computation of entitlement of duty credit scrip.

(b) Government reserves the right to impose restriction / change the rate/ceiling on Duty Credit Scrip under this chapter.

(c) Government may also notify goods in Appendix 3A which shall not be allowed for debiting through Duty Credit Scrips in case of import.

(d) Government may prescribe value cap of any kind for a product(s) or limit total reward per IEC holder under this chapter at any time.

 

Common Provisions for MEIS as per Import Export Policy 2015-20 (FTP 2015-20)

Transitional Arrangement

For the goods exported or services rendered upto the date of notification of this Policy, which were otherwise eligible for issuance of scrips under erstwhile Chapter 3 of the earlier Foreign Trade Policy(ies) and scrip is applied / issued on or after notification of this Policy against such export of goods or services rendered, the then prevailing policy and procedure regarding eligibility, entitlement, transferability, usage of scrip and any other condition in force at the time of export of goods or rendering of the services, shall be applicable to such scrips.

CENVAT/ Drawback

Additional Customs duty/excise duty/Service Tax paid in cash or through debit under Duty Credit scrip shall be adjusted as CENVAT Credit or Duty Drawback as per DoR rules or notifications. Basic Custom duty paid in cash or through debit under Duty Credit scrip shall be adjusted for Duty Drawback as per DoR rules or notifications.

Import under lease financing

Utilization of Duty Credit Scrip shall be permitted for payment of duty in case of import of capital goods under lease financing in terms of provision in paragraph 2.34 of FTP.

Transfer of export performance as per EXIM Policy of India 2015-20 (FTP 2015-20)

(a) Transfer of export performance from one IEC holder to another IEC holder shall not be permitted. Thus, a shipping bill containing name of applicant shall be counted in export performance / turnover of applicant only if export proceeds from overseas are realized in applicant’s bank account and this shall be evidenced from e - BRC / FIRC.

(b) However, MEIS, rewards can be claimed either by the supporting manufacturer (along with disclaimer from the company / firm who has realized the foreign exchange directly from overseas) or by the company/ firm who has realized the foreign exchange directly from overseas.

Facility of payment of custom duties in case of E.O. defaults and fee through duty credit scrips

(a) Duty Credit Scrip can be utilized / debited for payment of Custom Duties in case of EO defaults for Authorizations issued under Chapters 4 and 5 of this Policy. Such utilization /usage shall be in respect of those goods which are permitted to be imported under the respective reward schemes. However, penalty / interest shall be required to be paid in cash.

(b) Duty credit scrips can also be used for payment of composition fee under FTP, for payment of application fee under FTP, if any and for payment of value shortfall in EO under para 4.49 of HBP 2015-20.

Risk Management System

(a) A Risk Management System shall be in operation whereby every month Computer system in DGFT

Headquarters, on random basis, will select 10% of cases for each RA where scrips have already been issued, under each scheme. RA in turn may call for original documents in all such selected cases for further examination in detail. In case any discrepancy and/ or over claim is found on such examination, the applicant shall be under obligation to rectify such discrepancy and/or refund over claim in cash with interest at the rate prescribed under section 28 A A of the Customs Act 1962, from the date of issue of scrip in the relevant Head of Account of Customs within one month. The original holder of scrip, however, may refund such over claim by surrendering the same scrip whether partially utilized or fully unutilized, without interest.

(b) Regional Authority may ask for original proof of landing certificate, annexures attached to ANFs or any other document, which has been uploaded digitally at any time within three years from the date of issue of scrip. Failure to submit such documents in original would make applicant liable to refund the reward granted along with interest at the rate prescribed under section 28 A A of the Customs Act 1962, from the date of issuance of scrip. It would be the responsibility of applicant to maintain such documents, certificate etc. for a period of at least three years from the date of issuance of scrips.

Status Holder

(a) Status Holders are business leaders who have excelled in international trade and have successfully contributed to country’s foreign trade. Status Holders are expected to not only contribute towards India’s exports but also provide guidance and handholding to new entrepreneurs.

(b) All exporters of goods, services and technology having an import-export code (IEC) number shall be eligible for recognition as a status holder. Status recognition depends upon export performance. An applicant shall be categorized as status holder upon achieving export performance during current and previous two financial years, as indicated in paragraph 3.21 of Foreign Trade Policy. The export performance will be counted on the basis of FOB value of export earnings in free foreign exchange.

(c) For deemed export, FOR value of exports in Indian Rupees shall be converted in US$ at the exchange rate notified by CBEC, as applicable on 1st April of each Financial Year.

(d) For granting status, export performance is necessary in at least two out of three years.

Status Category

Export Performance

One Star Export House 3 FOB / FOR (as converted) Value (in US $ million)

Two Star Export House 25 FOB / FOR (as converted) Value (in US $ million)

Three Star Export House 100 FOB / FOR (as converted) Value (in US $ million)

Four Star Export House 500 FOB / FOR (as converted) Value (in US $ million)

Five Star Export House 2000 FOB / FOR (as converted) Value (in US $ million)

Grant of double weightage

(a) The exports by IEC holders under the following categories shall be granted double weightage for calculation of export performance for grant of status.

(i) Micro, Small & Medium Enterprises (MSME) as defined in Micro, Small & Medium Enterprises Development (MSMED) Act 2006.

(ii) Manufacturing units having ISO/BIS.

(iii) Units located in North Eastern States including Sikkim and Jammu & Kashmir.

(iv) Units located in Agri Export Zones.

(b) Double Weightage shall be available for grant of One Star Export House Status category only. Such benefit of double weightage shall not be admissible for grant of status recognition of other categories namely Two Star Export House, Three Star Export House, Four Star export House and Five Star Export House.

(c) A shipment can get double weightage only once in any one of above categories.

3.23 Other conditions for grant of status

(a) Export performance of one IEC holder shall not be permitted to be transferred to another IEC holder. Hence, calculation of exports performance based on disclaimer shall not be allowed.

(b) Exports made on re-export basis shall not be counted for recognition.

(c) Export of items under authorization, including SCOMET items, would be included for calculation of export performance.

Privileges of Status Holders

A Status Holder shall be eligible for privileges as under:

(a) Authorization and Customs Clearances for both imports and exports may be granted on self-declaration basis;

(b) Input-Output norms may be fixed on priority within 60 days by the Norms Committee;

(c) Exemption from furnishing of Bank Guarantee for Schemes under FTP, unless specified otherwise anywhere in FTP or HBP;

(d) Exemption from compulsory negotiation of documents through banks. Remittance / receipts, however, would be received through banking channels;

(e) Two star and above Export houses shall be permitted to establish Export Warehouses as per Department of Revenue guidelines.

(f) Three Star and above Export House shall be entitled to get benefit of Accredited Clients Programme (ACP) as per the guidelines of CBEC (website: http://cbec.gov.in).

(g) The status holders would be entitled to preferential treatment and priority in handling of their consignments by the concerned agencies.

(h) Manufacturers who are also status holders (Three Star/Four Star/Five Star) will be enabled to self-certify their manufactured goods (as per their IEM/IL/LOI) as originating from India with a view to qualify for preferential treatment under different preferential trading agreements (PTA), Free Trade Agreements (FTAs), Comprehensive Economic Cooperation Agreements (CECA) and Comprehensive Economic

Partnership Agreements (CEPA). Subsequently, the scheme may be extended to remaining Status Holders.

(i) Manufacturer exporters who are also Status Holders shall be eligible to self-certify their goods as originating from India as per para 2.108 (d) of Hand Book of Procedures.

(j) Status holders shall be entitled to export freely exportable items on free of cost basis for export promotion subject to an annual limit of Rs 10 lakh or 2% of average annual export realization during preceding three licensing years whichever is higher.

 Click here for latest update on Export assistance schemes in India

The above information is a part of Import Export workshop


SEIS (Service Exports from India Scheme)

 

The foreign Trade Policy of India 2015-20 introduced SEIS (Service Exports from India Scheme) for service exporters by modifying SFIS scheme of previous years by benefiting all service providers of India including foreign brand of Indian Companies. Detailed articles about SEIS have been written in this web blog, you may click here to read.



ASSISTANCE FROM TRADE PROMOTION COUNCILS AND COMMODITY BOARDS

Trade promotion council of different products and commodity boards helps exporters with various financial schemes and other service assistance. Market Development Assistance (MDA), Market Assistance Initiative (MAI), Financial support to attend Trade Fairs, various information supports etc. are some of them.  Click here for details.

 

You may  also contact concerned trade promotion council and commodity board for more details.

 


DUTY EXEMPTION AND REMISSION SCHEME FOR EXPORTERS:

 

Advance Authorization Scheme (AA scheme): 

As per foreign trade policy of India, inputs are allowed to import without duty payment for export purpose. The licensing authority fixes value addition on export products not below 15%. A stipulated period to import is allowed and validity for export obligation. For more details, contact nearest DGFT office (Director General of Foreign Trade, Government of India). I have mentioned a short note on Advance Authorization Scheme in this web blog separately, you can click here to read. Advance Authorization for annual requirement is also issued for items having standard input output norms those exporters having past export performance, minimum preceding two financial years.


Export Duty Drawback of Customs, Central Excise and Service Tax

Duty paid inputs against exported products is refunded to exporters in the form of Duty Drawback. If the rates of such items are scheduled under Drawback schedule, the amount of drawback is refunded accordingly. If not scheduled, a separate application has to be filed to fix Brand Rate. Detailed articles on Duty Drawback and Brand rate are available in this web blog with method of claim. Procedures to claim duty drawback


Brand rate under Duty Drawback for Exporters

If Duty Drawback rate has not been mentioned in schedule, exporters can approach concerned authority for Brand rate. The detailed article is available in this website, click here to read : What is Brand rate?Procedures to claim Brand rate


Rebate of Service Tax through all industry rates for Exporters

Service tax refund paid is reimbursable on specified output services used for export of goods at specified all industry rates fixed time to time by the authority.

 


EXPORT BENEFIT OF DUTY FREE IMPORT AUTHORIZATION

 

DFIA (Duty Free Import Authorization) scheme is the export scheme introduced by DGFT by clubbing DEEC (Advance License) and DFRC to support exporters for free import of inputs. I have written a separate updated article in detail about Duty Free Import Authorization (DFIA). You may click here to read.



DEPB, ANOTHER ADVANTAGE TO EXPORTER

 

DEPB (Duty Entitlement Pass Book) scheme is another export incentive scheme in India. At present, DEPB can be claimed post export. Import customs duty credit is allowed to exporters to neutralize the customs import duty against export of goods. Also read Can DEPB/DEEC bill can be converted to Drawback


EPCG SCHEME TO PROMOTE EXPORTS

Export Promotion Capital Goods (EPCG) scheme helps exporters to import capital goods with zero import duty for the purpose of production of export products with a commitment of export obligation period with licensing authority. Certain rate of relaxation is allowed to sell in local market after fulfilling export obligation. A detailed article about EPCG (Export Promotion Capital Goods) can be read in this website. How does EPCG work? EPCG under new Foreign Trade Policy 2015-20 Difference between EPCG and ECGC


CENTRAL EXCISE REBATE OF DUTY FOR EXPORTERS

Rebate of duty paid on excisable goods exported or duty paid on the material used in manufacture of such export goods may be claimed. Also read: Procedure for Central Excise Clearance Under Claim of Rebate


CENTRAL EXCISE DUTY EXEMPTION ON EXPORTS

 

Excisable goods are exempted to pay export excise duty with simple procedures with central excise department. Necessary registration of premise, factory or warehouse is required to be completed with concerned central excise department by executing bond. Click here to read Central Excise clearance procedures


DEEMED EXPORT BENEFITS

Deemed Export transactions are those transactions in which the goods supplied do not leave the country and the payment for such supplies is received either in Indian rupees or in free foreign exchange. You may go through this link to know in detail about Deemed Exports. Deemed exporters get benefit of refund of excise duty paid on final products, Duty drawback, imports under DEEC scheme, Special import licenses based on value of deemed exports etc. Click here to learn more about Deemed Exports


INCOME TAX BENEFITS FOR EXPORTERS

Income tax exemption to exporters are allowed by government in different categories. You may contact your nearest Income Tax Department to know latest updated information on income tax exemptions to exporters in India.

SALES TAX / VAT EXEMPTION TO EXPORTERS

No sales tax is required to pay for exports. The facility is extended to the suppliers of goods for export also. Value Added Tax (VAT) is also exempted for export goods. The details of such exemption of sales tax / VAT is available with the concerned Sales Tax Department. Read more How to get exemption of Sales Tax under exports     Is sales tax applicable on shipments effected under high sea sales   How does CENVAT Credit work?

Trade Promotion Programme, Focus LAC

 

 

BILATERAL TRADE AGREEMENTS BENEFITS TO EXPORTERS

Trade Agreement between countries promote exports each other by providing different special schemes to exporters. Click here to read about Bilateral Trade Agreements Difference between Multilateral Trade Agreements and Bilateral Agreements


POST OFFICE CLEARANCE FACILITY TO EXPORTERS

Post office clearance facility is also available for exporters who would like to export/import clear the goods in India. Read more: Procedures to claim under MEIS scheme under Export of goods through courier or foreign post offices

 


BANK ASSISTANCE FOR EXPORTERS

Many financial assistances with different schemes are given to exporters to boost exports in India. Pre Shipment Credit in Foreign Currency (PCFC) and in INR, Packing Credit loans, Supplier’s credit, Buyer’s credit, Post shipment Finance, short term and long term finance, Finance for special export projects, Working capital finance, Capital Equipment Finance, Fund for export consultancy and technological services, different guarantees for exports like Advance Payment Guarantee, Performance Guarantee, Retention Money Guarantee, Guarantee for customs, central excise and other government and private agencies etc. Banks also provide financial assistance to Export Oriented Units (EOU), Special Economic Zones (SEZs), Corporates, STPs, EHTPs, FTZs, MSMEs etc. Bank also provides Line of Credit mechanism for export of projects, equipment, goods and services from India.

Authorized banks also provide exporters to open Foreign currency account in the form of EEFC (Exchange Earners Foreign Currency) to help them in handling foreign currency easily without local currency fluctuation and to eliminate currency conversion charges. Many other services are also provided to exporters in India by authorized banks to boost exports for favourable balance of payments.


ECGC (EXPORT CREDIT GUARANTEE CORPORATION)

 

Export Credit Guarantee Corporation (ECGC) protects exporters in covering credit risk of overseas buyers. Click here to read more.

 

FEDERATION OF INDIAN EXPORTERS ORGANISATION

FIEO also plays a major role in promoting exports in India by assisting exporters in various ways.


EXPORT SUPPORT FROM CHAMBERS OF COMMERCE 

Chamber of Commerce at different parts of the country and Federation of Indian Chamber of Commerce and Industry (FICCI) help exporters in various ways to promote exporters in earning foreign currency to strengthen economy.


EXPORT ASSISTANCE FROM INDUSTRIES’ ASSOCIATIONS

 

The support from Exporters Organization formed privately also plays a major role in sharing practical problems facing by industry and helps to find solutions. Such exporter’s association takes up their issues with government time to time, so as to enable the government to introduce new policy or to amend existing one.


CENTRAL ASSISTANCE TO STATES FOR EXPORTS (ASIDE)

Assistance to States for Infrastructural Development for Exports (ASIDE) has been introduced by Central Government with an objective to involve States / Under Takings in export effort by providing assistance to the State Governments or State Under Takings Administrations for creating appropriate infrastructure for development and growth of exports.

 

TOWNS OF EXPORT EXCELLENCE (TEE)

India government declared a list of towns of export excellence where specialized export products are promoted. Click here to know towns of export excellence

 


BENEFITS TO SPECIAL GROUP OF EXPORTERS

 


BENEFITS FOR EXPORTERS FROM CERTAIN REGIONS

Exporters and manufacturers from special region such as Sikkim, Jammu and Kashmir etc. are given specific benefits by government. The exporters can contact the related government agencies for more details.

 

Export benefits to units having ISO 9000 (series) / ISO 14000 (series) / WHOGMP / HACCP / SEI CMM level-II and above status

Export units holding special status are also eligible for different exports benefits from government modifying time to time.


SSI/MSME BENEFITS

There are many schemes available for Micro Small and Medium Enterprises (MSME) and SSI (Small Scale Industries) including scheme to promote exports. You may approach concerned office. Benefits to MSME


Export benefits to Free Trade Zones (FTZ)

Export Units in Free Trade Zones can enjoy zero excise duty on goods manufactured for export purpose. Import customs duty is exempted for import of components used for manufacturing export goods. Domestic Tariff Area (DTA) sales up to certain rate is allowed.


Export Advantages for 
Electronic Hardware Technology Park (EHTP)

Advantages like Single point contact service, income tax benefits, DTA sales up to certain limit and many other export benefits can be enjoyed for units of Electronic Hardware Technology Park (EHTP)


Export benefits for 
Software Technology Parks

Many advantages like Foreign equity permission, income tax benefits, DTA sales up to certain limit and many other supports can be enjoyed for the units under STP.


Advantages to 100% Export Oriented Units (EOUs)

Import of second hand capital goods, re export of capital goods, income tax benefits, DTA sales up to certain limit and many other government assistances can be enjoyed by Export Oriented Units.


Export benefits to Bio Technology Park (BTP)

income tax benefits, re export of capital goods, DTA sales up to certain limit and many other conveniences can be enjoyed from different government and non-government agencies to BTP.


Export merits for Agri Export Zone(AEZs)

income tax benefits, re export of capital goods, DTA sales up to certain limit and many other export advantages can be availed for Agri Export Zone (AEZs)


Advantages of Electronic Hardware Technology Parks(EHTPs)

income tax benefits, re export of capital goods, DTA sales up to certain limit and may other export supports can be enjoyed by Electronic Hardware Technology Parks (EHTPs).

 


Export supports to Special Economic Zones

Government provides many benefits to Special Economic Zones in India to create an internationally competitive and smooth working environment for exports and thereby economic development of the country. Some of the advantages enjoyed by SEZ are single window clearance, free import of goods, exemption of customs duty for import of capital goods, consumables, raw materials, spares etc, reimbursement of CST, 0% income tax for 5 years, Foreign Direct Investment, exemption on MAT, Service Tax, DDT, CST, Service Tax, External commercial borrowing facility etc. and many more.

 



This post explains: How does exports benefit to exporters in India? What are the financial assistance to exporters? Advantage to exporters in India? What are the different government schemes to exporters? How does bank help exporters financially? Different financial schemes and other supports of Export Promotion Councils. Who are other organizations and agencies supporting exporters in India and how?

The above mentioned export benefits, schemes, financial assistance and other support to exporters in India by government and other different agencies could be withdrawn or modified. The actual beneficiaries may reconfirm with the concerned authorities whether such export benefits are valid.

 

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