MEIS-REW

MEIS REWARD RATE

DEFINITION

THE MEIS INCENTIVE

Under the purview of FTP 2015-20, MEIS plans to incentivise exports of goods that are manufactured in India/or have been produced in India.

These incentives are mainly for goods that are widely exported from India, that helps in making Indian exports competitive. This incentives are applicable to industries that produces or manufactures such goods. The MEIS covers all goods that are notified for the purpose of the scheme. The MEIS Scheme gives incentive in the form of a duty credit scrip or MEIS license which can be used for the payment of import duties or can be sold in the open market for a premium rate.

The incentives under the schemes are calculated as a percentage, which is 2%, 3% or 5% of the realised free-on-board (FOB) value exports in free foreign exchange/FOB value of exports as per shipping bills in free foreign exchange.

The incentives are then allotted through a MEIS duty credit scrip. The ‘free foreign exchange’ includes foreign exchange earned through international credit cards and other instruments allowed by the Reserve Bank of India (RBI).

THE NATURE OF REWARD

The duty credit scrips may be granted as rewards under MEIS. These scrips are freely transferable. Thus, if an exporter is not in position to use the duty credit scrip, he or she can sell the scrip in the open market. First time exports from SEZ are also covered under this incentive scheme. Under this scheme destination countries have been categorized as Group A, Group B and Group C.

The duty credit scrip is a pass that allows the holder of such a scrip, to import goods, without paying a specified amount in import duties

UTILITY OF DUTY FREE SCRIPS

  • The payment of custom duties for import of inputs/commodities, except items that are listed in appendix 3A
  • The payment of excise duties on domestic purchase of input/commodities. This also includes capital goods as per DOR notification
  • The payment of service tax on purchase of services as per DOR notification
  • The payment of custom duty and fee as per paragraph 3-18 of this policy
  • The purchase of commodities from private or public bonded warehouses.

VALIDITY PERIOD OF DUTY CREDIT SCRIP

A duty credit scrip is valid for 18 months from the date of issue. It should be valid for the actual debit of duty that has been made.