MEIS Scheme (Merchandise Exports from India Scheme)
MEIS or Merchandise Exports from India Scheme was launched with the aim of enhancement of the export of notified goods manufactured in any country. This scheme came into existence on 1 April 2015 by the Foreign Trade Policy. The government of India, the Merchandise Exports from India Scheme (MEIS), was initiated to improve the exportation of notified goods produced in the country. The scheme was introduced through the Foreign Trade Policy (FTP) that outcome on 1 April 2015. The MEIS will be active until 2020.and It will replace the incentive schemes mentioned below that were earlier offered under the Foreign Trade Policy 2014-2019:
- Market Linked Focus Product Scheme (MLFPS)
- Focus Product Scheme (FPS)
- Agriculture Infrastructure Incentive Scrip (AIIS)
- Focus Market Scheme (FMS)
- Vishesh Krishi Gramin Upaj Yojana (VKGUY)
The Ministry of Commerce and Industry is accountable for the execution of the MEIS, which is measured as an essential export endorsement proposal by the Indian government. In this scheme, over INR 22 thousand crores per year will be paid by the Government of India for exportation.
The objective of the MEIS:
According to the Indian Foreign Trade Policy 2015-20, the MEIS aims to neutralize infrastructural problems and related expenses occupied in the export of products or goods manufactured or produced in India. The scheme will concentrate on rights/products with elevated employment capability and elevated export amount, which eventually, will improve India’s passiveness in exports.
Features of the MEIS:
Beforehand, the FTP provided five other schemes for merchandise exports, but with MEIS, it has been made into a more comfortable and combined into one project only. Previously, the plans had various kinds of duty scripts and different conditions with it. The MEIS eradicates this hassle by merging all the requirements into a single scheme. Under this scheme, a percentage of achieved FOB (Free on Board) value of 2,3, or 5% of the exports, will be paid as incentives. The incentives are paid as the MEIS duty credit scrip that will be used to pay for numerous taxes/duties along with the excise duty/customs tax. The duty credit scrips issued under MEIS are easily transferable and will be used to pay excise duty, service tax, and customs duty. The incentives that are given under MEIS are also accessible to units based in Special Economic Zones (SEZs)
How to apply for MEIS incentive
- For claiming the incentives under the MEIS, the application has to be submitted online in a specific format, which is ANF-3A, and then filed with a digital signature.
- The form has to be provided on the Directorate General of Foreign Trade or DGFT with relevant Regional Authority.
- There will be other application that needs to be filed for each dock of export. One application can only include a maximum of 50 shipping bills.
- For exports passed out by the EDI port, and there is no need to give shipping bill. However, a copy of the application, RCMC, and e-BRC is mandatory.
- The online form must have thee-BRC and EDI shipping bill.
- If exports are shipped through a non-EDI dock, then these documents need to be given – scanned copies of other prescribed documents for claiming Scrip, proof of landing, and copy of export promotion with the text of non-EDI shipping bills.
- The applicants are bound to keep the original documents of the photocopies of the documents.
- If the original documents are not given while the licensing authority demands it, the granted incentives will be taken back with interest.
- The online application does not allow applicants to feed manually.
- To claim the rewards for MEIS, the ‘Let Export Date’ will be considered as the real date for determining the corresponding ITC (HS) code and product qualification.
How to use the MEIS incentive?
The incentive duty scrips can be used to pay customs duties on while importing goods, anti-dumping duty, safety duty, and several other custom duty under the FTP 2015-20. The scrips can also be reassigned for importing goods.
Exporters can also ask for a part of the duty credit scrip with a term of each Scrip with the value of at least INR Five lakh. The demand can also be made after the issue of Scrip along with the same dock of registration as valid for the relevant Scrip. However, this method is only allowed only in the value of ports with Electronic Data Interchange. If there is non-EDI ports, a duty credit scrip will not be divided once it is issued.
The scheme offers the elasticity of import and reimbursement for exporters and removed much structural inadequacy of the previous reward schemes.
Goods notified under MEIS
MEIS rewards almost 5,000 items sorted and acquainted under numerous ITC (HS) codes and with equivalent reward rates from 2% to 5%. The DGFT acquires the pieces.
Benefits to Exporters
Exporters get some incentives under this scheme, and these rewards are provided at a price-fixed rate, and they are different in each country, and they vary product to product. The countries allowed for awards are divided into categories: Category A, Category B, and Category C.
Class A
It consists of Traditional Markets of (30) - the USA, Canada, and European Union (28)
Category B
It is Emerging and Focuses on Markets (139) - CIS countries (12), Africa (55), ASEAN countries (10), Latin America and Mexico (45), Turkey and Western Asian countries (13), South Korea, Japan, Taiwan, and China
Category C
It comprises of other markets (70).
For most of the goods and services, the rate of incentives ranges from 2% to 5%, which can change from product to product.
Commodities which are eligible for incentives
Under this scheme, incentives are rewarded for products divided into various product groups based on specific areas.The maximum incentives will be provided for - agricultural and village industry products, value-added products, packages, labor-intensive products, eco-friendly and green products, products with a large number of producers, etc. The first time help will be provided for - export of fruits and vegetables, dairy products, oil meals, paper board products, AYUSH, and Herbal products. Global support will be provided for - tea, flowers, fruits, coffee, essential oils, vegetables, cereals preparation, handloom, shellac, marine products, jute products and technical textiles, handmade carpets, wood articles, coir, other textiles and readymade garments sustained in the markets of the USA, Canada, European Union, and Japan. Support to major markets will be provided for - surgical, pharmaceuticals, industrial machinery, machine tools, herbals, auto components/parts, hand tools, automobiles, ships, bicycles, plastics, chemicals, ceramic and glass, steel furniture, rubber, leather garments, lighters, wood, iron, steel, etc..
Ineligibility of benefits under MEIS
The segments stated below are not eligible for incentives:
- SEZ/EOU/EHTP/FTWZ products exported by DTA units.
- Supplies did for SEZ units from DTA units.
- Export of imported products under paragraph 2.46 of FTP.
- Export products that cost minimum export price.
- Exports through trans-shipment, meaning thereby exports that are emerging in the third country but trans-shipped through India.
Duration of MEIS
The MEIS incentives are valid from 1 April 2015 until the legitimacy of the FTP 2015-20, 31 March 2020.
Official Website
You can find more details about this scheme on dgft.gov.in
Frequently Asked Questions
Q. What is the Duty Credit scrip?
Duty Credit scrips are scrips provided to exporters as “incentives” by the Govt. of India.
Q. What is the GST rate on the MEIS scrip?
Thre is no GST on Scrip. The government has removed the GST on sale of this Scrip.
Q. What is the validity of scrips?
MEIS scrips are valid for 18 months.
Q. Are there any hidden fees?
There is no hidden fees.
Q. Can I sell the scrips?
Yes, you can quickly sell them.
Q. Can I claim MEIS if shipping bills are submitted under the ‘No’ reward scheme?
You can not claim for that if you have filed under (‘No’) reward scheme.
Q. Is it mandatory to get only registered Scrips?
Yes, it is mandatory to get scrips registered at customs.
Q. Can I sell unregistered Scrip at customs?
Yes. However, unregistered scrips bring a lesser rate because of the extra process burden on the buyer.
Q. Why should I buy Duty credit scrips?
The value of one Scrip is INR 1000, and it is being sold at INR 950. You can use that at customs while importing goods at a 100% face value of Rs.1000 and save Rs.50.
Q. Can I return the unutilized value in Scrip?
No, you cannot return unutilized balance. But, you can use the balance value to offset customs duty on other imports.