Government provides certain incentives to promote exports, which are directly linked to the value of the exports. The list of goods and services that are eligible for such incentives are defined.
Presently MEIS (Merchandise Export Incentive Scheme) for Goods and SEIS (Service Export Incentive Scheme) for Services are popular. All other schemes in the past have been merged into these two. In addition there are other schemes that helps exporters in their marketing and logistics efforts, some of which are listed below
Rebate of State & Central Taxes and Levies (RoSCTL)
This scheme is re-launched by the Government of India for the Textile Industry. This will ensure that the costs incurred in the form of Central and State Taxes and Levies will be refunded back to the manufacturer to provide boost and growth of textiles exports.
MEIS (Merchandise Export from India Scheme)
Gives a value of 2-20% on FOB from the export of goods from India in the form of a duty credit script. This scheme was applicable from 01.04.2015 to 31.12.2020. The incentive can be claimed within 3 years of export. However, by recent notification, the government has cut down the time to 31.12.2021.
The scripts can only be used for the payment of Basic Customs Duty, Additional Customs Duty specified under Section 3(1), 3(3) and 3(5) of the Customs Tariff Act, Education Cess, Anti-Dumping Duty, Safeguard Duty and Transition Product Specific Safeguard Duty wherever applicable. There are certain terms and conditions attached to this scheme that need to be taken care of on the basis of the exporter profile prior to export.
Transport and Marketing Assistance (TMA):
TMA for some specified Agriculture products which will not only help the exporters to bring down the higher costs of transportation and will also help promote brand recognition for Indian agricultural products in the overseas markets. It is a direct transfer of cash in exporter’s account.
SEIS (Service Export from India Scheme)
Gives a value of 3-7% of the net FE earned from the export of services for eligible services provided in a specific manner in the form of duty credit script. This scheme was applicable from 01.04.2015 to 31.3.2020. For 2019-20 the rates have been announced and the last date for application is 31.12.2021.
The scripts can only be used for the payment of Basic Customs Duty, Additional Customs Duty specified under Section 3(1), 3(3) and 3(5) of the Customs Tariff Act, Education Cess, Anti-Dumping Duty, Safeguard Duty and Transition Product Specific Safeguard Duty wherever applicable. There are certain terms and conditions attached to this scheme that need to be taken care of on the basis of the exporter profile prior to export.
Project Imports:
Project Imports is a special advantageous scheme for import of capital goods, which are being imported for the initial setting up of a unit, projects or substantial expansion of an existing unit. All eligible goods are covered under chapter 98 of ITC HS Classification.
Industrial Plants, Irrigation Projects, Power Projects, Mining Projects, Oil Exploration Projects, Metro projects, Airport development project and certain other projects as notified by the government are covered under the scheme.
Benefits / Advantages of Import under Project Import Scheme:
- Assessment under one heading: thus obviating all disputes with the customs regarding tariff classification.
- Concessional Duty: Effective duties under Project Imports are lower than normal and depends on the kind of Project. For Industrial Projects/Non-Mega Power Projects etc., all items covered under the Project Imports attract only 7.5% Basic Customs Duty under the exemption notification.
- Then there are certain items used in a project that are levied a duty of 10%, 15% etc. In the case of projects like Solar Power it can go upto 40%. Substantial duty savings can be planned using the Project Import route for such projects. Benefit of Project Import has been withdrawn for Solar Power projects recently.
- There are certain changes as per the Budget 2022, and the concessional duty of 5% +IGST is available only to Projects registered on or before 30th Sept 2022 and for imports before 30th Sept 2023 under such registered projects. After this, the duty of 7.5% + IGST would be applicable. Even then Project imports can be a beneficial scheme for several projects. You may refer D.O. F. No. 334/01/2022-TRU, Dated 1st February, 2022.
- Further, EPCG can also be availed of along with Project Imports. This simultaneous availment of two schemes can lower the export obligations under EPCG scheme. This benefit is now withdrawn in the new FTP 2023.
The Procedure
The project needs approval from the relevant ministry or department (depending upon the kind of project), after which it needs registration at customs along with the necessary bond and BG. Customs clearance under the scheme then enables the benefit.
After import, proper record keeping is needed so that a proper reconciliation can be done at the time of closure of Project Import and release of Bond/BG.
Role of Andees team:
Andees team assist in the identification of the benefits available under the MEIS SEIS scheme. Further team will do documentation required, application preparations, representation and coordination with DGFT, Customs and other concerned Government Departments till the receipt of final scrip.
Later we will assist you in actually realizing the value of the script in cash. For sale, purchase of scrips please contact the Andees team.
As of now, there is no GST applicable on MEIS or SEIS scheme. For more details on GST applicability on MEIS SEIS RoSCTL, please contact Team Andees.
Some of the other benefits that are provided by the Government to promote exports are:
- Grant of Status Holder to large exporters that gives them certain priviledges.
- Market Access Initiatives (for studies, brochures etc.),
- Marketing Development Assistance for participation in trade fairs etc.
- Assistance in Logistics cost for certain export products and by certain state government schemes