Disabling of benefits hit exporters

Kochi | Updated on November 15, 2019

Representative image   -  Sanjit Das

Exporters found that the claims from the period August 1, 2019 was disabled by DGFT and it came as a shock to the exporter community

Disabling of rewards to exporters under Export from India Schemes introduced to offset infrastructural inefficiencies, associated costs and encourage export of notified goods has left exporters in a tight spot.

A joint press meet organised by All India Spices Exporters Forum and Federation of Indian Coir Exporters Association expressed anxiety over the disappearance of benefits from DGFT website since August.

Introduced in 2015 under the Foreign Trade Policy, the Merchandise Exports from India Scheme (MEIS) was created out of a merger of five existing reward schemes. It incentivise merchandise exports of more than 8,000 items now and is the biggest of its kind. Directorate General of Foreign Trade (DGFT) is formulating and notifying the five year policy.

Exporters earn duty credits at fixed rates of 2 per cent, 3 per cent, and 5 per cent, depending upon the product and country. Rewards under the scheme are payable as percentage of realized free on–board value and MEIS duty scrips can be transferred or used for payment of a number of duties including basic customs duty.

“We have absolutely no idea as to how to deal with this crisis. The initial feedback from sources spoke of a technical glitch, which would be rectified soon. However there has been no clarity on the enabling of the system apart from some updates via tweets in this regard from DGFT,” said Rajiv Palicha, Chairman, All India Spices Exporters Forum.

Exporters found that the claims from the period August 1, 2019 was disabled by DGFT and it came as a shock to the exporter community.

Exporters were legitimately expecting MEIS to continue till March 31 2020, when the new FTP comes in place.

FTP has a good legal framework for trade facilitation. Sustained growth in exports needs policy continuity adhering to the duration clause of FTP, he said.

Since the entire export business from India is facing a crisis due to this situation, several representations have been made to the Central Government in the last 3 months. Due to this uncertainty, India is losing out to other countries in terms of competitive pricing in the Global Market.

If the benefit is not allowed in full from August 1, exporters will lose heavily as they work with very thin margins and will all sustain losses in current year. Further export of spice and spice products, would reduce by 30 per cent bringing loss of forex to the country, he added.

Published on November 15, 2019

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