What is MEIS: Everything about Merchandise Export Incentive Scheme in India
MEIS is an export incentive scheme in India that promoted exports of designated goods and products. Learn more about its benefits, eligibility, process, and more in this blog.
To encourage Indian businesses to export from India, the Government of India introduced the Merchandise Export Scheme (MEIS) as an incentive scheme under the Foreign Trade Policy (FTP) of 2015-2020. Under this scheme, exporters were compensated for infrastructural inefficiencies and other associated costs by being offered rewards by way of duty credit scripts1.
The primary aim of the Merchandise Export Scheme in India was to stimulate production and export of designated goods and products. The MEIS award was to be computed based only on Free on Board (FOB) value of INR 5 lakh if the value of exports is greater than INR 5 lakh per shipment. Under this program, duty credit scrips, which are offered to exporters as awards, can be freely transferred and serve the following purposes4:
(i) Settling the Basic Customs Duty and Additional Customs Duty outlined in sections 3(1), 3(3), and 3(5) of the Customs Tariff Act, 1975, for the import of various items, including inputs and capital goods, as per the Department of Revenue Notification, except for those mentioned in Appendix 3A. (ii) Covering the Central excise duties on the domestic procurement of inputs or goods. (iii) Covering the Basic Customs Duty and Additional Customs Duty specified in Sections 3(1), 3(3), and 3(5) of the Customs Tariff Act, 1975.
Benefits of MEIS
Duty credit scrips can be employed to cover customs duties when importing inputs or goods, including safeguard duty, anti-dumping duty, and any other customs duty. Although MEIS has been discontinued and replaced by the RoDTEP scheme, earlier, exporters had the option to request a division of the duty credit scrip, with each portion having a minimum value of INR 5 lakh. This request could be made even after the scrip had been issued, provided it was done through the same registration port as initially applied for. However, this procedure was applicable only for ports that are Electronic Data Interchange (EDI) enabled. In the case of non-EDI ports, it was not possible to split a duty credit scrip once it had been issued. The MEIS scheme offered exporters the flexibility of importing and settling payments, and it eliminated many structural inefficiencies present in the previous incentive schemes5.
MEIS incentive rates and how to calculate them
There were previously five different programs to reward export of goods with various duty credits, each with a unique set of restrictions. The Merchandise Exports from India Scheme replaced these programs. The MEIS duty credit scrip was the vehicle through which rewards under the MEIS benefits were paid out as a proportion (2%, 3%, or 5%) of the realised FOB value of covered exports. Customs, excise, and service taxes were just a few of the duties and taxes that could be paid with the scrip. The transferability of scrip inputs and scrip outputs was complete. Consequently, exporters had a lot more options6.
Eligibility for MEIS
Below are some of the points that were the criteria to determine the eligibility for MEIS7:
1. Any exporter, whether a merchant or manufacturer exporter, could avail incentives under MEIS if their export products were listed in Appendix 3B of MEIS Schedule. 2. Eligibility was solely based on the type of product being exported. 3. Special Economic Zone (SEZ) Units and Export Oriented Units (EOU) were eligible to claim benefits under MEIS. 4. There was no specified minimum turnover requirement to qualify for MEIS benefits. 5. Products exported through e-commerce platforms via courier were also eligible for MEIS benefits. 6. The exported product must have been of Indian origin; products that were re-exported were not eligible. 7. Shipping bills that included the Declaration of Intent and had the Scheme reward option marked as YES were eligible for the MEIS Scheme.
Documents required for MEIS
To establish the arrival of an export consignment in a designated market, the exporter could provide the following documents7: 1. A self-attested copy of the import bill of entry submitted by the importer in the specified market. 2. A delivery order issued by the port authorities. 3. An arrival notice issued by the goods carrier. 4. Scanned copies of documents such as a tracking report from the goods carrier (shipping line/airline, etc.) or their accredited agent in India, duly certified by them, demonstrating the arrival of the export cargo at the destination market. 5. In the case of a landlocked designated market, rail/lorry receipts for the transportation of goods from the port to the landlocked designated market. 6. Any other document that could effectively demonstrate to the relevant Regional Authority (RA) that the goods had landed in or reached the designated market.
1. However, if they applied through EDI-enabled ports, there was no need to submit physical copies to acquire MEIS benefits; instead, they only had to provide export promotion copies of non-EDI shipping bills and proof of landing. 2. Separate applications for each port had to be submitted. 3. The application had to be filed within one of the following timeframes, whichever was later: ● Within 12 months from the Let Export (LEO) date. ● Within 3 months from the date of either the customs uploading the EDI shipping bills onto the DGFT server or the printing of shipping bills for non-EDI shipping bills.
Ineligible export categories under MEIS
Duty credit scrip entitlement under MEIS was not granted to the following export categories/sectors7:
(i) Exporting entities like EOUs (export-oriented units), electronic hardware technology parks (EHTPs), biotechnology parks (BTPs), and software technology parks (STPs) that are benefiting from direct tax advantages or exemptions. (ii) Exported goods originating from units in the Domestic Tariff Area (DTA) to Special Economic Zone (SEZ) units. (iii) Exports of imported goods as described in paragraph 2.46 of the Foreign Trade Policy (FTP). (iv) Exports involving trans-shipment, which referred to goods that had their origin in a third country but were routed through India. (v) Deemed exports (vi) Products from SEZ/EOU/EHTP/BPT/FTWZ units that were exported through units in the Domestic Tariff Area (DTA). (vii) Items that were either prohibited or restricted for export according to Schedule 2 of the Export Policy in the ITC (HS) unless they were explicitly mentioned in Appendix 3B. (viii) Red sanders and beach sand. (ix) Exported products that were subjected to a minimum export price or export duty. (x) Precious materials like diamonds, gold, silver, and platinum, as well as other precious metals in any form, including plain and adorned jewellery, and other precious and semi-precious gemstones. (xi) Ores and concentrates of all types and from all sources (xii) Various types of cereals. (xiii) Sugar in all its forms. (xiv) Crude petroleum oil, primary petroleum products, and base products in all varieties and compositions. (xv) Export of milk and milk products. (xvi) Export of meat and meat products. (xvii) Products that incorporate precious metals or diamonds or items adorned with precious stones. (xviii) Exports conducted by units in Free Trade Warehousing Zones (FTWZ).
• In addition to normal reimbursements and penalties associated with carrying out the aforementioned exports, there was an additional incentive under the MEIS license. • It is contrary to WTO trading standards. • 2% to 5% of the FOB export value. • The issuance of transferable scrips can be achieved.
• It involves a refund of indirect taxes on inputs used to produce exported goods but not currently covered by any other programmes. • RoDTEP is WTO trade standards compliant. • Expected to be smaller than the current MEIS Incentive programme for product-based incentives. • Issuance in the form of electronic scrip that will be kept in an electronic ledger or transferrable duty credit.
Amazon Global Selling: Easy e-commerce exports from India
If you are a business owner and you want to sell your products across the world, Amazon Global Selling enables you to list and sell ‘Made in India’ products on 18 Amazon global marketplaces. As an e-commerce exports program, Amazon Global Selling provides support and guidance at every step of your exports journey – documents and licenses, logistics, payments, advertising, and more.
Registered sellers can choose to ship their products by themselves through Merchant Fulfilled Network (MFN) or they can opt for Fulfillment by Amazon (FBA) and outsource order fulfillment to Amazon including packing, storage, delivery, and returns. Amazon Global Selling simplifies the process of international shipping to the world, helping businesses navigate customs and reach a vast audience.
Frequently Asked Questions
Which scheme was introduced as the MEIS license scheme replacement?
In order to replace the current MEIS system for exports of goods from India, the government created the RoDTEP program, which started being implemented from January 1, 2021. The RoDTEP programme was announced in a press release from the Ministry of Finance on December 31, 202012.
What goods were included under MEIS?
The categories of products that were included under MEIS were agricultural and village industry products, pharmaceutical products, textiles and garments, electrical and electronics products, and automobiles10.
What is the cheapest way to send a package from India to the UAE?
The cheapest way to send a package from India to the UAE is by sea shipping. However, sea shipping takes longer than air shipping. If you need your package to arrive quickly, air shipping is a more suitable option.
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*Map not to scale. The map has been used for design and representational purpose only, it does not depict the geographical boundaries of the country. These do not conform to the external boundaries of India recognized by the Survey of India.