Government approves MEIS allocation till December 2020

The Central Board of Indirect Taxes and Customs Thursday approved allocation of Rs 39,097 crore for FY 2019-20 and Rs 15,555 crore for April-December 2020 for benefits under merchandise exports incentive scheme (MEIS).

CBIC issued an office memorandum to the effect, which also said that the Director General of Foreign Trade should limit the issuance of scrips till Rs 16,000 crore for FY 2020-21.

"It is to inform that the competent authority has approved the allocation of amount of Rs 39,097 crore for MEIS benefits for exports made during FY 2019-20. Further allocation totaling Rs 15,555 crore for MEIS benefits for exports made during the period, April 1, 2020 to December 31, 2020 is conveyed with the approval of the competent authority," the drawback division of CBIC said Thursday.


MEIS provides duty benefits depending on product and country. Rewards under the scheme are payable as percentage of realised free-on-board value (of 2%, 3% and 5%) and the MEIS duty credit scrip can be transferred or used for payment of a number of duties including the basic customs duty. The government’s outgo under MEIS was Rs 45,000 crore in 2019-20.

The government has already capped the benefits under it to Rs 2 crore per exporter from September 1-December 31, 2020.

"It is suggested to limit the issuance of MEIS duty scripts in this financial year. Accordingly, DGFT is requested to issue MEIS scripts, up to a total value of Rs 16,000 crore in FY 2021. Issuance of remaining scripts may be spread over the subsequent financial year and appropriate mechanism," the drawback division added.

DGFT had put MEIS registrations of exporters on hold in mid-2020 as the allocations were not released by the finance ministry.

India has decided to stop MEIS by the end of 2020 as the scheme has been challenged at the World Trade Organization for allegedly distorting global trade in favour of Indian exporters. The production linked incentive scheme has replaced MEIS after Cabinet approved it on Wednesday.