Exporters have moved the Gujarat high court over imposition of cess on customs duty paid through scrip-based incentives provided to them.
The high court granted iterim relief to petitioners against any "coercive" measures by the authorities.
When asked what will come in these measures, Abhishek Rastogi, counsel for exporters and partner at Khaitan & Co., said these would include forcible imposition of cess on Merchandise Exports from India Scheme (MEIS)
An instant special civil application under article 226 of the constitution has been filed to challenge the recovery of education cess and social welfare surcharge from the petitioners at the time of imports where customs duty is paid through MEIS.
MEIS is a scrip-based incentives provided to exporters under the foreign trade policy 2015-20. These scrips could be used for payment of customs and other related duties.
"As the cesses are imposed on the aggregate customs duty, ideally they are not payable as anything multiplied by zero is zero," Rastogi said.
The scheme is being replaced by the WTO-compliant Remission of Duties or Taxes on Export Product (RoDTEP) scheme. MEIS was to expire from this month, but was later extended till the end of this financial year.