Finance Minister reaches out to exporters with fresh stimulus
A new scheme, Remission of Duties or Taxes on Export Products, will replace MEIS scheme.
“The Government is to extend the scheme of reimbursement of taxes and duties for export promotion and it will also offer higher insurance cover to banks lending working capital for exports,” said Sitharaman.
The minister informed that a new scheme called Remission of Duties or Taxes on Export Products is to replace the existing all Merchandise Exports from India Scheme (MEIS). Existing MEIS and old Rebate of State Levies Scheme (ROSL) in textile will continue till December 31, 2019. "In a bid to help the exports, the government has revised priority sector lending (PSL) norms for export credit. Effective monitoring of Export financing will now be done by the Department of Commerce," she added.
She said, Interest Equalization Scheme (IES) on pre and post-shipment rupee export credit introduced from April 1, 2015 has been providing interest equalisation at 3% to exporters on 416 lines and for all MSME exporters. Going forward, the Interest Equalization Scheme (IES) rate has now been increased to 5% for MSME exporters with effect from November 2, 2018 and merchant exporters were covered under the scheme with effect from January 2, 2019.
“Fully automated electronic refund route for input tax credits (ITC) will now be executed in GST which is expected to monitor and speed up ITC refunds, she said, adding that the Export Credit Guarantee Corporation (ECGC) will expand the scope of Export Credit Insurance Scheme (ECIS).
To boost exports, Sitharaman announced that a Dubai-like mega annual shopping festival will take place next year which will be spread across four destination. These festivals, among other things will focus on, gems, jewellery and textiles.
Sitharaman said a comprehensive Agriculture Export Policy was launched on December 6, 2018 with the aim to double farmers' income by 2022. Further, Transport and Marketing Assistance (TMA) scheme launched on March 5, 2019 for the mitigating disadvantage of a higher cost of transportation for export of specified agricultural products.
Technology will be further leveraged by timely completion of ongoing incentives to further reduce "Time to export". An action plan to reduce time to export/turn-around time in airports and ports benchmarked to international standards will be implemented by December 2019," the Finance Minister said .
Commenting on the stimulus announced by the minister, MS Mani, Partner, Deloitte India said, "Businesses will need to carefully plan the transition from MEIS to RoDTEP as the schemes are different - they should be given adequate time to transition so that initial transition pains are avoided moving over to complete automation for GST refunds would enthuse all exporters in a situation of elongated working capital cycles - they would hope that the system is adequately tested and certified before launch."
Bringing relief to MSME exporters, the Finance Minister announced that all small taxpayers with minor procedural default will not be prosecuted.