Indian government has announced limits on benefits under the Merchandise Exports from India Scheme (MEIS) for shipments valued at or below Rs20mn ($0.27mn) between Sep 1 to Dec 31. The Department of Revenue has asked the Commerce ministry to review the coverage of the Merchant Export from India Scheme (MEIS) in order to bring the financial benefits under the program to Rs9,000 crore (Rs90bn or $1.22bn) in the current financial year.
“Steel exporters could have to bear nearly Rs600/mt ($8/mt) loss due to non-availability export benefits in the coming days,” said a steel maker based in North India.
As per the decision, the total reward which can be claimed by an IEC (Import Export Code) holder does not exceed the highest limit of Rs20mn. this is applicable for shipping bills with LEO dated between Sep 1 to Dec 31.
DGFT has also decided that the MEIS benefits shall not be applicable for exports effective from Jan 1, 2021. Exports of all steel and non-ferrous commodities are hence likely to slow down in the coming months.
Exports made for one year starting from Sep 1 or any new IEC (Import Export code claim) obtained would not be eligible to obtain any benefits, Davis understands from the industry sources.
The DGFT notification dated Sep 1 also suggests that the limitation of Rs2 crores for IEC holders may be subject to a downward revision to ensure that the total Allocation of MEIS issued in the said period does not exceed Rs50bn as per government regulation.