About Merchandise export from India scheme:
- Merchandise Exports from India Scheme (MEIS) is one of the two schemes introduced under Foreign Trade Policy of India (FTP 2015-20), as a part of Exports from India Scheme. The other scheme is Service Exports from India Scheme (SEIS).
- The scheme provides incentive in the form of duty credit scrip to the exporter to compensate for his loss on payment of duties. The scrips can be transferred or used for payment of a number of duties including the basic customs duty.
What is the issue?
- In 2019, a WTO dispute resolution panel ruled that MEIS was not in compliance with the global trade norms.
- Additionally, many exporters had persistently complained that the MEIS scheme doesn’t offset all the taxes.
- To address these issues, the government introduced the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme with a view to give a boost to the country’s outbound shipments.
- The government announced that whatever taxes, or duties or local levies imposed by the Centre, State or local governments that are not getting refunded through any other scheme, will be done through RoDTEP in a way that is compliant with the WTO norms.
- It is proposed to digitally refund to exporters, duties and taxes levied at the Centre, State and local levels.
- The RoDTEP scheme will replace the current Merchandise Export from India Scheme (MEIS) in a phased manner.
Why in News?
- The government has recently capped export incentives under the Merchandise Export from India Scheme at Rs 2 crore per exporter on outbound shipments made during the period from September 1 to December 31, 2020.
- In addition, it has been notified that the MEIS scheme is withdrawn with effect from January 1, 2021.
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