Govt can extend MEIS by 3 months

The government is mulling the idea of extending the validity of the Merchandise Exports From India Scheme (MEIS) to March 31, 2021. This will ease the transition to the proposed Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, which is supposed to replace the MEIS.  Extending MEIS is crucial to supporting the exporters as they struggling in the wake of the pandemic, exporters said.

The RoDTEP scheme was meant to go on floor from January 2021. RoDTEP was designed to make outbound shipments zero-rated. It is is essentially aimed at reimbursing even embedded taxes (that are not subsumed by the GST) paid on inputs consumed in exports.  “A final decision on such an extension will be made soon,” stated an official source.

MEIS came under the government’s scrutiny in the light of COVID-19. The resource-starved revenue department slashed its allocation under the scheme to just Rs 15,555 crore for the April-December period, which is just about 40% of the outlay for the entire last fiscal. Meanwhile, exporters complain about several structural bottlenecks, including embedded taxes and elevated logistics costs, to highlight the need for sustained benefits.