MEIS Benefits May Be Taken By SEZ/EOU Or DTA And Not Both…??

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What Is MEIS Benefit?

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).

Objective

Main objective of MEIS scheme is to offset infrastructural inefficiencies and the associated costs of exporting products produced in India giving special emphasis on those which are of India’s export interest and have the capability to generate employment and enhance India’s competitiveness in the world market.

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Background

This Directorate has received references from exporters seeking clarification on eligibility of Exports made from SEZ/EOU units on behalf of DTA units under the Merchandise Exports from India Scheme (MEIS) , in the context of the Para 3.06 – ineligible categories of MEIS , sub para (v) , which states that SEZ/ EOU /EHTP/ BTP /FTWZ products exported through DTA units are ineligible for MEIS rewards.

Notification

As per policy Circular No. 20/2015-2020 Dated: 22nd February, 2019 by Directorate General of Foreign Trade, Department of Commerce, Government of India

Entitlement of benefit 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.

MEIS Benefits May Be Taken By SEZ/EOU Or DTA And NOT Both…!

The matter has been examined in this Directorate. It is clarified that the exports which are made/have been made directly from a EOU/ SEZ unit to Foreign consumer in which export documents are prepared and filed at the customs office of concerned SEZ/EOU Unit, mentioning the name of the EOU/SEZ unit along with the name of the DTA unit on whose behalf the exports is made, would be eligible for MEIS benefits subject to condition that only one of the said units i.e. either EOU/SEZ unit or the DTA unit can claim the benefits under MEIS. It is further clarified that the eligibility as above, is applicable to only those cases where goods are produced by the EOU/SEZ unit and are exported directly to the foreign consumer, with the name of the DTA .

MEIS Benefits May Be Taken By SEZ/EOU Or DTA And NOT Both:

It is further clarified that the MEIS benefits may be taken by the SEZ/ EOU or DTA and not both, on the basis of disclaimer from the other firm, subject to fulfillment of each of the criterion as below for every shipping bill for which claim is made under MEIS.

  • The Commercial Invoice shows the name of the DTA exporter and shows the name of the SEZ/EOU unit as the manufacturer.
  • The declaration of intent to avail MEIS benefits has been specified in the Commercial Invoice.
  • The related GST Invoice/ARE-1 has been filed by the DTA firm and shows the name of the SEZ/ EOU unit as manufacturer and it has been signed by both the DTA and SEZ/EOU unit as the case may be.
  • The relevant Shipping bill shows the name of the exporter and shows the details as Factory sealed with the address and name of the EOU/SEZ unit.
  • The scheme details in the related shipping bill are shown as EOU/EPZ/SEZ/EHTP/STP (with Scheme Code as 21-E0U/EPZ/SEZIEHTP/STP).
  • party details in the related Shipping bill should show DTA.
  • The e-BRC is in the name of the DTA firm.

Disclaimer:"The information contained herein is only for informational purpose and should not be considered for any particular instance or individual or entity. We have obtained information from publicly available sources, there can be no guarantee that such information is accurate as of the date it is received or it will continue to be accurate in future. No one should act on such information without obtaining professional advice after thorough examination of particular situation."

Prepared By

Somnath P.K

CA Final,

Article Assistant,

B.C. Shetty

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Ankit C Shetty

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