What is MEIS?
Merchandise Exports from India Scheme (MEIS) under the 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 Objective of the 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.
With the aim of making India’s products more competitive in the global markets, the scheme provides incentives in the form of duty credit scrip to the exporter to compensate for his loss of payment of duties. The incentive is paid as a percentage of the realized FOB value (in free foreign exchange) for notifying goods going to notified markets. To determine the quantity of incentive, the countries have been segregated into three groups. Incentives for export of each product at 8-digit level (ITC HS codes), depend on the group in which its destination country belongs.
There are essentially three country groups. Group A has India’s traditional destinations such as the EU countries and USA. Group B has the maximum number of countries and covers almost all of India’s major export destinations globally. It is worth mentioning here that Group B has the highest quantum of incentive. Group C on the other hand has no incentive at all. It can be divided into, SAARC, Australia and New Zealand, EU and some African countries.
What is SEIS?
Service Exports from India Scheme (SEIS) aims to promote export of services from India by providing duty scrip credit for eligible exports. Service Providers of notifying services, located in India are eligible for the Service Exports from India Scheme. To be eligible, a service provider (Company / LLP / Partnership Firm) should have a minimum net free foreign exchange earnings of USD $15, 000 in the preceding financial year to be eligible for duty credit scrips. For proprietorships, or individual service providers, a minimum net foreign exchange earnings of USD $10, 000 in the preceding financial year are required to be eligible for the scheme. Also, in order to claim the reward under the SEIS scheme, the service provider shall have to have an active Import Export Code (IE Code) at the time of rendering such services for which rewards are claimed.
Service providers of eligible services shall be entitled to duty credit scrip at notified rates on the net foreign exchange earned. Duty credit scrips can be used for the payment of custom duties for procurement of services, custom duty in case of default in the fulfillments of export obligation under Advance Authorization/EPCG, etc.