The government\u2019s decision to cap export incentives under MEIS scheme at \u20b92 crore per exporter on outbound shipments made during September-December, 2020 is going to \u201cseriously\u201d affect traders, FIEO said on Wednesday.<\/p>\n
The Federation of Indian Export Organisations (FIEO) President Sharad Kumar Saraf said exports that will be made during September-December are based on orders that had been negotiated earlier, factoring in the existing Merchant Export from India Scheme (MEIS) benefit. These benefits are part of the export competitiveness and therefore the sudden change will affect exporters\u2019 financially as buyers were not going to revise their prices upwards, he added.<\/p>\n
\u201cHowever, the sudden imposition of a cap of \u20b92 crore per IEC (Import Export Code), on MEIS benefit of exports made during September 1 to December 31, 2020, is going to seriously affect exporters, whose numbers may not be very large, but their contribution to exports warrant a revisit to the imposition of the cap,\u201d he said.<\/p>\n
The Centre announced the cap on Tuesday. Mr. Saraf also expressed concern over the outlay of \u20b95,000 crore given for exports during September-December, 2020 with the condition that if claims exceeded this limit, the ceiling may further be revised downwards.<\/p>\n
\u201cThis will create huge uncertainty as those eligible for a cap of \u20b92 crore will not be able to factor in even such benefits in their exports,\u201d he added. He urged the Centre to extend the MEIS till March 31, 2021, coterminous with the existing Foreign Trade Policy.<\/p>\n
The RoDTEP (Remission of Duties or Taxes on Export Product) committee has started the work, but the industry is facing challenges in providing the data due to frequent local lockdowns, non-availability of transport and non-functioning of auditors.<\/p>\n
\u201cMoreover, fixation of rate for over 10,000 items at 8 digits would be a time-consuming exercise, particularly as it has to meet the discipline of WTO,\u201d Saraf noted.<\/p>\n
The extension in the MEIS Scheme till March 2021 will help in a smooth rolling of the RoDTEP scheme as well since the scheme is going to stay for zero-rating of exports, he said. <\/p>\n<\/div>\n