Merchandise Exports from India Scheme (MEIS)
Merchandise Exports from India Scheme (MEIS) under Foreign Trade Policy of India (FTP 2015-20) is one of the two schemes introduced in Foreign Trade Policy of India 2015-20, as a part of Exports from India Scheme. (The other scheme is SEIS, Service Exports from India Scheme)
The details of MEIS, Merchandise Exports from India Scheme under Export Import Policy 2015-2020 (FTP 2015-20) is given below under Foreign Trade Policy of India 2015-20, paragraph wise.
Nature of Rewards
Duty Credit Scrips shall be granted as rewards under MEIS. The Duty Credit Scrips and goods imported / domestically procured against them shall be freely transferable. The Duty Credit Scrips can be used for the following requirements:
(i) Payment of Customs Duties for import of inputs or goods, except items listed in Appendix 3A.
(ii) Payment of excise duties on domestic procurement of inputs or goods, including capital goods as per DoR notification.
(iii) Payment of service tax on procurement of services as per DoR notification.
(iv) Payment of Customs Duty and fee as per paragraph 3.18 of this Policy.
When shall MEIS come in to force?
The MEIS Scheme shall come into force with effect from the date of notification of this Policy, i.e. the rewards under MEIS shall be admissible for exports made/services rendered on or after the date of notification of this Policy.
Merchandise Exports from India Scheme (MEIS)
Objective of Merchandise Exports from India Scheme (MEIS) as per Indian Foreign Trade Policy 2015-20 (FTP 2015-20) is to offset infrastructural inefficiencies and associated costs involved in export of goods/products, which are produced/manufactured in India, especially those having high export intensity, employment potential and thereby enhancing India’s export competitiveness.
Entitlement under MEIS
Exports of notified goods/products with ITC[HS] code, to notified markets as listed in Appendix 3B, shall be rewarded under MEIS. Appendix 3B also lists the rate(s) of rewards on various notified products [ITC (HS) code wise]. The basis of calculation of reward would be on realized FOB value of exports in free foreign exchange, or on FOB value of exports as given in the Shipping Bills in free foreign exchange, whichever is less, unless otherwise specified.
Export of goods through courier or foreign post offices using e-Commerce
(i) Exports of goods through courier or foreign post office using e-commerce, as notified in Appendix 3C, of FOB value up to Rs. 25000 per consignment shall be entitled for rewards under MEIS.
(ii) If the value of exports using e-commerce platform is more than Rs 25000 per consignment then MEIS reward would be limited to FOB value of Rs.25000 only.
(iii) Such goods can be exported in manual mode through Foreign Post Offices at New Delhi, Mumbai and Chennai.
(iv) Export of such goods under Courier Regulations shall be allowed manually on pilot basis through Airports at Delhi, Mumbai and Chennai as per appropriate amendments in regulations to be made by Department of Revenue. Department of Revenue shall fast track the implementation of EDI mode at courier terminals.
Ineligible categories under MEIS as per Import Export Policy 2015-2020 (FTP 2015-20)
The following exports categories /sectors shall be ineligible for Duty Credit Scrip entitlement under MEIS, EXIM Policy 2015-20 (FTP 2015-20).
(i) EOUs / EHTPs / BTPs/ STPs who are availing direct tax benefits / exemption.
(ii) Supplies made from DTA units to SEZ units
(iii) Export of imported goods covered under paragraph 2.46 of FTP;
(iv) Exports through trans-shipment, meaning thereby exports that are originating in third country but trans-shipped through India;
(v) Deemed Exports;
(vi) SEZ/EOU/EHTP/BPT/FTWZ products exported through DTA units;
(vii) Items, which are restricted or prohibited for export under Schedule-2 of Export Policy in ITC (HS), unless specifically notified in Appendix 3B.
(viii)Service Export.
(ix) Red sanders and beach sand.
(x) Export products which are subject to Minimum export price or export duty.
(xi) Diamond Gold, Silver, Platinum, other precious metal in any form including plain and studded jewellery and other precious and semi-precious stones.
(xii) Ores and concentrates of all types and in all formations.
(xiii) Cereals of all types.
(xiv) Sugar of all types and all forms.
(xv) Crude / petroleum oil and crude / primary and base products of all types and all formulations.
(xvi) Export of milk and milk products.
(xvii)Export of Meat and Meat Products.
(xviii)Products wherein precious metal/diamond are used or Articles which are studded with precious stones.
(xix) Exports made by units in FTWZ.
Effective date of scheme for MEIS as per Import Export Policy 2015-2020 (FTP 2015-20)
The schemes shall come into force with effect from the date of notification of this Policy, i.e. the rewards under MEIS shall be admissible for exports made on or after the date of notification of this Policy.
Special Provisions under IMPEX Policy 2015-20 (FTP 2015-20)
(a) Government reserves the right in public interest, to specify export products or services or markets, which shall not be eligible for computation of entitlement of duty credit scrip.
(b) Government reserves the right to impose restriction / change the rate/ceiling on Duty Credit Scrip under this chapter.
(c) Government may also notify goods in Appendix 3A which shall not be allowed for debiting through Duty Credit Scrips in case of import.
(d) Government may prescribe value cap of any kind for a product(s) or limit total reward per IEC holder under this chapter at any time.
Common Provisions for MEIS as per Import Export Policy 2015-20 (FTP 2015-20)
Transitional Arrangement
For the goods exported or services rendered upto the date of notification of this Policy, which were otherwise eligible for issuance of scrips under erstwhile Chapter 3 of the earlier Foreign Trade Policy(ies) and scrip is applied / issued on or after notification of this Policy against such export of goods or services rendered, the then prevailing policy and procedure regarding eligibility, entitlement, transferability, usage of scrip and any other condition in force at the time of export of goods or rendering of the services, shall be applicable to such scrips.
CENVAT/ Drawback
Additional Customs duty/excise duty/Service Tax paid in cash or through debit under Duty Credit scrip shall be adjusted as CENVAT Credit or Duty Drawback as per DoR rules or notifications. Basic Custom duty paid in cash or through debit under Duty Credit scrip shall be adjusted for Duty Drawback as per DoR rules or notifications.
Import under lease financing
Utilization of Duty Credit Scrip shall be permitted for payment of duty in case of import of capital goods under lease financing in terms of provision in paragraph 2.34 of FTP.
Transfer of export performance as per EXIM Policy of India 2015-20 (FTP 2015-20)
(a) Transfer of export performance from one IEC holder to another IEC holder shall not be permitted. Thus, a shipping bill containing name of applicant shall be counted in export performance / turnover of applicant only if export proceeds from overseas are realized in applicant’s bank account and this shall be evidenced from e - BRC / FIRC.
(b) However, MEIS, rewards can be claimed either by the supporting manufacturer (along with disclaimer from the company / firm who has realized the foreign exchange directly from overseas) or by the company/ firm who has realized the foreign exchange directly from overseas.
Facility of payment of custom duties in case of E.O. defaults and fee through duty credit scrips
(a) Duty Credit Scrip can be utilized / debited for payment of Custom Duties in case of EO defaults for Authorizations issued under Chapters 4 and 5 of this Policy. Such utilization /usage shall be in respect of those goods which are permitted to be imported under the respective reward schemes. However, penalty / interest shall be required to be paid in cash.
(b) Duty credit scrips can also be used for payment of composition fee under FTP, for payment of application fee under FTP, if any and for payment of value shortfall in EO under para 4.49 of HBP 2015-20.
Risk Management System
(a) A Risk Management System shall be in operation whereby every month Computer system in DGFT
Headquarters, on random basis, will select 10% of cases for each RA where scrips have already been issued, under each scheme. RA in turn may call for original documents in all such selected cases for further examination in detail. In case any discrepancy and/ or over claim is found on such examination, the applicant shall be under obligation to rectify such discrepancy and/or refund over claim in cash with interest at the rate prescribed under section 28 A A of the Customs Act 1962, from the date of issue of scrip in the relevant Head of Account of Customs within one month. The original holder of scrip, however, may refund such over claim by surrendering the same scrip whether partially utilized or fully unutilized, without interest.
(b) Regional Authority may ask for original proof of landing certificate, annexures attached to ANFs or any other document, which has been uploaded digitally at any time within three years from the date of issue of scrip. Failure to submit such documents in original would make applicant liable to refund the reward granted along with interest at the rate prescribed under section 28 A A of the Customs Act 1962, from the date of issuance of scrip. It would be the responsibility of applicant to maintain such documents, certificate etc. for a period of at least three years from the date of issuance of scrips.
Status Holder
(a) Status Holders are business leaders who have excelled in international trade and have successfully contributed to country’s foreign trade. Status Holders are expected to not only contribute towards India’s exports but also provide guidance and handholding to new entrepreneurs.
(b) All exporters of goods, services and technology having an import-export code (IEC) number shall be eligible for recognition as a status holder. Status recognition depends upon export performance. An applicant shall be categorized as status holder upon achieving export performance during current and previous two financial years, as indicated in paragraph 3.21 of Foreign Trade Policy. The export performance will be counted on the basis of FOB value of export earnings in free foreign exchange.
(c) For deemed export, FOR value of exports in Indian Rupees shall be converted in US$ at the exchange rate notified by CBEC, as applicable on 1st April of each Financial Year.
(d) For granting status, export performance is necessary in at least two out of three years.
Status Category
Export Performance
One Star Export House 3 FOB / FOR (as converted) Value (in US $ million)
Two Star Export House 25 FOB / FOR (as converted) Value (in US $ million)
Three Star Export House 100 FOB / FOR (as converted) Value (in US $ million)
Four Star Export House 500 FOB / FOR (as converted) Value (in US $ million)
Five Star Export House 2000 FOB / FOR (as converted) Value (in US $ million)
Grant of double weightage
(a) The exports by IEC holders under the following categories shall be granted double weightage for calculation of export performance for grant of status.
(i) Micro, Small & Medium Enterprises (MSME) as defined in Micro, Small & Medium Enterprises Development (MSMED) Act 2006.
(ii) Manufacturing units having ISO/BIS.
(iii) Units located in North Eastern States including Sikkim and Jammu & Kashmir.
(iv) Units located in Agri Export Zones.
(b) Double Weightage shall be available for grant of One Star Export House Status category only. Such benefit of double weightage shall not be admissible for grant of status recognition of other categories namely Two Star Export House, Three Star Export House, Four Star export House and Five Star Export House.
(c) A shipment can get double weightage only once in any one of above categories.
3.23 Other conditions for grant of status
(a) Export performance of one IEC holder shall not be permitted to be transferred to another IEC holder. Hence, calculation of exports performance based on disclaimer shall not be allowed.
(b) Exports made on re-export basis shall not be counted for recognition.
(c) Export of items under authorization, including SCOMET items, would be included for calculation of export performance.
Privileges of Status Holders
A Status Holder shall be eligible for privileges as under:
(a) Authorization and Customs Clearances for both imports and exports may be granted on self-declaration basis;
(b) Input-Output norms may be fixed on priority within 60 days by the Norms Committee;
(c) Exemption from furnishing of Bank Guarantee for Schemes under FTP, unless specified otherwise anywhere in FTP or HBP;
(d) Exemption from compulsory negotiation of documents through banks. Remittance / receipts, however, would be received through banking channels;
(e) Two star and above Export houses shall be permitted to establish Export Warehouses as per Department of Revenue guidelines.
(f) Three Star and above Export House shall be entitled to get benefit of Accredited Clients Programme (ACP) as per the guidelines of CBEC (website: http://cbec.gov.in).
(g) The status holders would be entitled to preferential treatment and priority in handling of their consignments by the concerned agencies.
(h) Manufacturers who are also status holders (Three Star/Four Star/Five Star) will be enabled to self-certify their manufactured goods (as per their IEM/IL/LOI) as originating from India with a view to qualify for preferential treatment under different preferential trading agreements (PTA), Free Trade Agreements (FTAs), Comprehensive Economic Cooperation Agreements (CECA) and Comprehensive Economic
Partnership Agreements (CEPA). Subsequently, the scheme may be extended to remaining Status Holders.
(i) Manufacturer exporters who are also Status Holders shall be eligible to self-certify their goods as originating from India as per para 2.108 (d) of Hand Book of Procedures.
(j) Status holders shall be entitled to export freely exportable items on free of cost basis for export promotion subject to an annual limit of Rs 10 lakh or 2% of average annual export realization during preceding three licensing years whichever is higher.
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