Home India Ministry of Commerce and Industry In exercise of the powers conferred by Section 5 of the Fore...
Date: 2020-09-01 Category: Extra Ordinary State: Union Government Country: India

In exercise of the powers conferred by Section 5 of the Foreign Trade Development and Regulation Act

Issued by Ministry of Commerce and Industry · Department of Commerce

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Executive Summary & Key Takeaways

Executive Summary: This notification amends the Foreign Trade Policy 2015-20, imposing a ceiling on Merchandise Exports from India Scheme (MEIS) benefits. The total reward granted to an IEC holder under MEIS shall not exceed Rs. 2 Crore per IEC on exports made from September 1, 2020, to December 31, 2020. The MEIS scheme is withdrawn effective January 1, 2021. Key Points / Main Content: MEIS Reward Ceiling: * The total MEIS reward per IEC holder is capped at Rs. 2 Crore for exports made between September 1, 2020, and December 31, 2020, based on the Let Export Order (LEO) date. * The ceiling is subject to downward revision to ensure the total claim does not exceed the government's allocation of Rs. 5,000 Cr for the specified period. Eligibility Restrictions: * IEC holders who did not export between September 1, 2019, and August 31, 2020, or obtained a new IEC on or after September 1, 2020, are ineligible for MEIS benefits for exports made from September 1, 2020. MEIS Withdrawal: * MEIS benefits are not available for exports made from January 1, 2021. Impact Analysis: IEC Holders: * Impact: Limited MEIS rewards, potential ineligibility based on export history, and the end of the MEIS scheme. * Action Required: Assess eligibility for MEIS benefits, adjust export strategies based on the new ceiling and scheme withdrawal, and ensure that total claims for the period 01.09.2020 to 31.12.2020 do not exceed Rs. 2 Crore. Exporters: * Impact: Change in export incentives may affect profitability and competitiveness. * Action Required: Re-evaluate export pricing and strategies considering the MEIS changes and explore alternative schemes. Government: * Impact: Capped expenditure on MEIS, ensuring it stays within the allocated Rs. 5,000 Cr budget. * Action Required: Monitor MEIS claims to stay within the budget and potentially revise the reward ceiling downwards.

Key Entities Referenced

Foreign Trade Policy 2015-20: A government policy document that outlines guidelines and regulations related to foreign trade. Foreign Trade Development and Regulation Act, 1992: An act of the Indian Parliament to provide for the development and regulation of foreign trade. Merchandise Exports from India Scheme (MEIS): A scheme to promote the export of notified goods or products that are manufactured or produced in India. Directorate General of Foreign Trade: The agency of the Ministry of Commerce and Industry responsible for implementing the Foreign Trade Policy. New Delhi: The location where the notification was issued, New Delhi, Delhi Amit Yadav: Director General of Foreign Trade, who issued the notification Ministry of Commerce and Industry: The Indian government ministry responsible for international trade and commerce. Let Export Order (LEO): A document issued by customs authorities allowing goods to be exported.
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रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. 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Two new paragraphs, 3.04A and 3.04B are inserted in the Foreign Trade Policy as below: "3.04 A The total reward which may be granted to an IEC holder under the Merchandise Exports from India Scheme (MEIS) shall not exceed Rs. 2 Crore per IEC on exports made in the period 01.09.2020 to 31.12.2020 [period based on Let Export Order (LEO) date of shipping bill(s)]. Any IEC holder who has not made any export with LEO date during the period 01.09.2019 to 31.08.2020 or any new IEC obtained on or after 01.09.2020 would not be eligible for submitting any claim for benefits under MEIS for exports made with effect from 01.09.2020. The aforesaid ceiling may be subject to further downward revision to ensure[भाग II—खण् ड 3(ii)] भारत का रािपत्र : असाधारण 3 that the total claim under the Scheme for the period (01.09.2020 to 31.12.2020) does not exceed the allocation prescribed by the Government, which is Rs 5,000 Cr. 3.04 B Benefits under MEIS shall not be available for exports made with effect from 01.01.2021." Effect of this Notification: A limit on total reward under MEIS has been imposed so that for exports made in the period 01.09.2020 to 31.12.2020 the total reward which can be claimed by an IEC holder does not exceed the ceiling of Rs. 2 Cr. Further, it has also been notified that any IEC holder who has not made any exports for a period of one year preceding 01.09.2020 or any new IECs obtained on or after the date of publication of this Notification would not be eligible for submitting any claim under MEIS. In addition, it has been notified that MEIS Scheme is withdrawn with effect from 01.01.2021. The aforesaid ceiling will be subject to further downward revision to ensure that the total claim under MEIS for the period (01.09.2020 to 31.12.2020) does not exceed the prescribed allocation by the Government, which is Rs. 5,000 Cr. [F.No. 01/61/180/288/AM20/PC-3 (Part-1)] AMIT YADAV, Director General of Foreign Trade Ex officio Addl. Secy. Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.

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