Chennai: The government said it will forgo revenue of Rs 50,000 crore by introducing a new scheme called Remission of Duties or Taxes on Export Products (RoD-TEP) and replacing the existing Merchandise Exports from India Scheme (MEIS) and old Rebate of State Levies Scheme (ROSLS). The revenue outgo under the previous schemes was almost equivalent to Rs 50,000 crore.
The existing MEIS and old ROSL in textiles will continue till December 31. Addressing the media, finance minister Nirmala Sitharaman said that up to Rs 50,000 crore will go through the new RoDTEP or revenue foregone by the exchequer will up to Rs 50,000 crore.
The government had to phase out the old MEIS in textiles by 2018 as its per capita Gross National Income has exceeded the $1,000 mark. The scheme could not be continued for all other sectors for long. “The government was working on replacing the MEIS. Now they have announced a new scheme. But the revenue outgo under the old schemes is almost equivalent to what has been announced now,” said Mr K. Unnikrishnan, deputy director general, FIEO.
“Further, in March, the government had announced the ROSL and we are not clear as to whether exporters will get the benefit of the scheme,” said Mr Sanjay K, Jain, chairman, CITI.
The textile industry is disappointed as the yarn segment will still be left out. Yarn exports have dipped to 35 per cent as it had become less competitive in the international market after the ROSL scheme was withdrawn.
Among some of the positive announcements, the government has revised priority sector lending (PSL) norms for export credit. Effective monitoring of export financing will be done by the department of commerce and tracked through a dashboard, the minister said. This is expected to provide some relief for exporters for whom getting bank finance has been a major worry.
Expanding the scope of Export Credit Insurance Scheme (ESIC) by ECGC will make banks increasingly lend to exporters. While the exporters will have to absorb the premiums, the minister said she will announce some special scheme for MSMEs.
The government will put in place a fully electronic refund scheme on input tax for exporters by end of this month. Most of the exporters have been hit by working capital crunch as the input tax credit refunds were getting delayed. An electronic refund scheme is expected to make the process faster.
A FTA Utilisation Mission will be set up which will be headed by a senior officer in the department of commerce, and will work with FIEO and export houses to utilise concessional tariffs in each FTA.
The finance minister also announced that India will hold annual mega-shopping festivals like the Dubai Shopping Festival to boost exports and will cut the turnaround time in ports and airports via use of technology and enable handicrafts industry to harness e-commerce for exports.
