AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYYes
Tax-based export incentive
On 1 April 2015, the new Foreign Trade Policy 2015-2020 was announced. The new Policy includes an overhaul of the Indian export incentive system. Effective 1 April 2015, the various export incentive instruments are unified under a single new instrument, the Merchandise Export Incentive Scheme (MEIS). The MEIS simplifies the export incentive system and removes the conditions applied in previous variants. The common feature of the prior incentive schemes was that they came in the form of a "duty scrip". Under these instruments, exporters would earn duty scrip proportional to the FOB value of their exports. Exporters could use said scrip to offset tax expenditures in other areas. The destination countries and products for which such scrip was available depended on the exact program. Under the MEIS, no such conditions apply.
In its original form, notified via Public Notice 2, the MEIS includes more than 4'900 products. The incentive available for each product depends on the export destination. To this end, the world is split into three country groups (A, B and C). Group A includes the European Union members plus the United States. For those destinations, MEIS includes incentives for a total of 3973 products. The HS codes included in this intervention refer to products eligible for export incentives to these countries. Please see the further interventions under this state act for details on the incentives to the other country groups.
On 31 March 2020, the Ministry of Commerce and Industry announced that the existing Foreign Trade Policy 2015-2020, which was to expire on 31 March 2020, will be extended till 31 March 2021.
On 15 April 2020, the Ministry of Commerce and Industry notified through Trade Notice 03/2020-21 that the benefits under the MEIS scheme will be available until 31 December 2020, unless the incentive on the product is replaced by the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme.