Brief on Foreign Trade Policy 2015-20
In every five years, the Government of India introduces Foreign Trade Policy which is a framework for benefits of export and import of goods. Ministry of Commerce and Industry has introduced the new Foreign Trade Policy (“FTP”) 2015-20 vide Notification 01/2015-2020 dated 1st April 2015.
The policy has incorporated various new provisions in support of initiatives like Make in India, Digital India and Skills India.
The new FTP has launched various schemes under “Exports From India Schemes” with an aim to provide more rewards to the exporters and to offset infrastructural inefficiencies and associated costs involved and to provide exporters a level playing field.
MEIS INDIA SCHEME
The old FTP has introduced the following four schemes which are subsumed into MEIS:
- Focus Product Scheme (“FPS”) : It focuses on export of notified products which have high export intensity.
- Market Linked Focus Product Scheme (“MLFPS”): It focuses on export of products which high export intensity and not covered in FPS.
- Focus Market Scheme (“FMS”): It was launched to enhance India’s export competitiveness to notified countries.
- Vishesh Krishi and Gram Udyog Yojana (“VKGUJ”): It focuses to promote export of agriculture produce.
The new policy has merged all the previous schemes into a single scheme known as MEIS. Under the MEIS, the notified goods exported to notified markets as per Annexure 3B are eligible for benefit in the form of duty credit scrips.
The following export categories /sectors shall be ineligible for Duty Credit Scrip entitlement under MEIS:
- EOUs / EHTPs / BTPs/ STPs who are availing direct tax benefits / exemption;
- Supplies made from DTA units to SEZ units;
- Export of imported goods covered under paragraph 2.46 of FTP;
- Exports through trans-shipment, meaning thereby exports that are originating in third country but trans-shipped through India;
- Deemed Exports;
- SEZ/EOU/EHTP/BPT/FTWZ products exported through DTA units;
- Items, which are restricted for export under Schedule-2 of Export Policy in ITC (HS), unless specifically notified in Appendix 3B;
- Service Export;
- Red sanders and beach sand;
- Export products which are subject to Minimum export price or export duty;
- Diamond Gold, Silver, Platinum, other precious metal in any form including plain and studded jewellery and other precious and semi-precious stones;
- Ores and concentrates of all types and in all formations;
- Cereals of all types;
- Sugar of all types and all forms, unless specifically notified in Appendix 3B;
- Crude / petroleum oil and crude / primary and base products of all types and all formulations;
- Export of milk and milk products, unless specifically notified in Appendix 3B;
- Export of Meat and Meat Products, unless specifically notified in Appendix 3B;
- Products wherein precious metal/diamond are used or Articles which are studded with precious stones;
- Exports made by units in FTWZ; and
- Items, which are prohibited for export under Schedule-2 of Export Policy in ITC (HS).
- Exports of notified goods/products with ITC[HS] code, to notified markets as listed in Appendix 3B and Appendix 3C, is eligible for reward in the form to Duty Credit Scrip at notified rates on realized FOB value of exports.
- The present rates of reward are between 0% to 5%.
Scrips can be utilized for payment of basic custom duty. The scheme has given relaxation to the actual user condition and the Duty Credit Scrips and goods imported / domestically procured against them shall be freely transferable.
Time limit for filing application for duty credit scrip
Application for obtaining Duty Credit Scrip under MEIS shall be filed within a period of:
- Twelve months from the Let Export (LEO) date or
- Three months from the date of:
- Uploading of EDI shipping bills onto the DGFT server by Customs.
- Printing/ release of shipping bills for Non-EDI shipping bills.
Validity Period of Duty Credit Scrips
Duty Credit Scrip shall be valid for a period of 24 months from the date of issue.
How ASC can help you
- Determining the eligibility of goods exported.
- Filing the application and liaising with department to obtain the benefit.
- Assistance in In house utilization of Scrip or assistance in selling the Scrip.