A halfway house is better than none

The government has given some useful dispensations for exporters, though some of these go only halfway.

Under the Merchandise Exports from India (MEIS) scheme, as many as 5012 ITC (HS) codewise list of products are covered. Under 2,787 of these, rewards were allowed only for exports to countries in Groups A and B. In these cases, exporters were required to produce the landing certificate. From May 4, the benefits are allowed for export to all countries, and landing certificates will not be required for claiming the MEIS duty credits. This will significantly save on costs.

However, the way the public notice reads, it appears that for exports made before May 4, they do have to produce the landing certificates. Exporters are now required to file separate MEIS applications for exports made before and after the date. The Director General of Foreign Trade (DGFT) should consider doing away with this stipulation and even for benefits under the earlier Focus Market Scheme.

Under the Incremental Exports Incentivisation Scheme (IEIS), notified in December 2012, exporters were entitled for duty credits, based on the incremental export growth during the January-March quarter over the corresponding period in the previous year. In September 2013, the government prescribed that for claims beyond a certain limit, scrutiny would be more stringent. The then DGFT gave a wrong interpretation and put a ceiling on the claims. His interpretation was struck down by the Bombay High Court, in the case of JSW Steel [2016 (334) E.L.T. 222 (Bom.)]. So, in a welcome development, the present DGFT has now asked that IEIS claims from all exporters be processed without any cap.

There was also an annual IEIS scheme, giving duty credits based on the incremental growth in exports during 2013-14 over 2012-13. In that one, too, the then DGFT restricted the claims to a certain limit. And, in fact, got the software amended to ensure clams beyond that limit could not be filed at all. Logically, the present DGFT should have also abolished the cap for the annual IEIS scheme, granting time for filing supplementary claims and without any cut in entitlement. However, he has not. Hopefully, this will be done after modifying the software.

For status recognition as an export house, the earlier foreign trade policies considered the export performance for the current plus previous three years. In the 2015-16 policy, the period was unnecessarily reduced to current plus previous two years. The government has now restored the previous position of current plus previous three years, except for gem and jewellery exporters. This change will operate prospectively. The long overdue list of services, payments for which are received in rupee terms and which can be counted for benefits under the Services Exports from India Scheme, and towards discharge of export obligation under the Export Promotion Capital Goods Scheme, have also been notified.

The finance ministry has also amended the relevant excise notifications issued under Rules 18 and 19 of the Central Excise Rules, 2002, allowing rebate of infrastructure cess and allowing removal of goods without payment of the said cess. This cess was introduced on March 1 this year, on motor vehicles under Tariff Heading 8703.
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