MEIS benefits allowed for exports through courier, says expert

We are a manufacturer-exporter of engineering goods (automobile parts). We make regular exports through couriers. Para 3.06 (i) of FTP restricts MEIS benefits to only Appendix-3C items for exports through couriers. Our item finds no mention in Appendix-3C. We are not sure whether our products, exported through courier are eligible for MEIS. Please clarify.

Para 3.06 (i) of FTP deals with exports of goods through courier or the foreign post office, using e-commerce. As per Para 9.17 (a) of FTP, “‘e-commerce’ for the purpose of Merchandise Exports from India Scheme (MEIS) under Foreign Trade Policy (2015-20) (FTP) shall mean the export of goods hosted on a website accessible through the internet to a purchaser. While the dispatch of goods shall be made through courier or postal mode, as specified under the MEIS, the payment for goods purchased on e-commerce platform shall be done through international credit /debit cards and as per the Reserve Bank of India Circular (RBI/2015-16/185) [A.P. ( DIR Series) Circular No. 16 dated September 24, 2015.] as amended from time to time.” Since your exports are not through e-commerce platform, you are eligible for MEIS under the general provisions for MEIS. You must, however, ask the courier to file a shipping bill in your name indicating your intent to claim MEIS.

We are merchant exporters having an export order in our name from a buyer abroad. Can we ask our supporting manufacturer to export the goods and file the shipping bill? 

As per Para 2.42 of FTP, “Third party exports (except Deemed Export) as defined in Chapter 9 shall be allowed under FTP. As per Para 9.60 of FTP, “‘Third-party exports’ means exports made by an exporter or manufacturer on behalf of another exporter(s). In such cases, export documents such as shipping bills shall indicate names of both manufacturer exporter/manufacturer and third party exporter(s). Bank Realisation Certificate (BRC), Self Declaration Form (SDF), export order and invoice should be in the name of third party exporter.” So, the manufacturer can file the shipping bill on behalf of the merchant exporter.

Can an Indian resident (buyer) place an export order with another Indian resident (seller) for shipping goods to a consignee abroad?

No. As per Regulation 8 of Foreign Exchange Management (Export of Goods and Services) Regulations, 2015, “Unless otherwise authorised by the Reserve Bank, the amount representing the full export value of the goods exported shall be paid through an authorised dealer in the manner specified in the Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2000 as amended from time to time.” This is reiterated at Para A3 of RBI Master Direction no. 16/2015-16 dated January 1, 2016. Para A2 of the same Master Direction says that it is obligatory on the part of the exporter to realise and repatriate the full value of goods/software/services to India within a stipulated period from the date of export. These stipulations cannot be complied with where the Indian party (resident) makes payment in Indian rupees.

Business Standard invites readers’ SME queries related to excise, VAT and exim policy. You can write to us at smechat@bsmail.in