In a bid to provide relief to lakhs of exporters, the Piyush Goyal-led commerce ministry has suggested fresh steps to hand out export incentives under the Merchandise Exports from India Scheme (MEIS), while seeking to limit the outgo and check possible frauds. The Rs 5,000-crore plan will see benefits under MEIS capped at Rs 2 crore per exporter on exports made between September and December. There will be no change in the coverage of MEIS and the applicable rates, a source familiar with the proposal shared with the revenue department told.
To prevent misuse of the scheme by fly-by-night operators, who make claims based on the new importer-export code (IEC), the commerce department has proposed that all such identification numbers obtained on or after a specified date will be ineligible to submit claim for exports made from September 1. From January, a new export incentive scheme kicks in.
The idea is to ensure that till that time a restricted MEIS will cover nearly 98% of the exporters who claim MEIS benefits. “The commerce department wants to protect the smaller players so that they remain unaffected by the changes,” said a government source. The proposal sent to the revenue department, which has capped MEIS claims at Rs 10,000 crore, is based on an analysis of claims for 2018-19.
The 2%, who are left out, may not be impacted significantly as they are large exporters, an officer said. A large number of exporters have factored in the benefits while negotiating the price of their consignments. An advance notice of four months prior to the end date of MEIS will provide certainty for future pricing decisions, the commerce department has argued.
Exporters are complaining that the revenue department’s decision is a fresh blow to their business at a time when orders have fallen sharply due to the coronavirus pandemic, leaving many battling for survival. “Genuine exporters should be protected and allowed to claim benefits for exports during these four months, while also avoiding the possibility of fraud,” said a source.