India is the Developing Country having fastest growing economies in the world, and the Indian Government has created various foreign trade policies which can enhance economic progress by Improving Indian exports. To enhance the exports from India and to provide the financial assistance Government has taken few steps for enhancing the exports in country by introducing export incentive schemes, the objective of these schemes to simplify the export process and make it attractive for the exporters.
Why Government providing financial assistance in the form of incentive schemes –
- To make Indian goods/services competitive in Global Market,
- To generate the employment in the country
- To offset infrastructure inefficiency involved in export process.
The Following export incentive schemes launched by the Indian Government so that Indian economy grows with increase in exports from the country –
Merchandise Exports From India Scheme – This is also known as MEIS Scheme which applies to the certain goods export. MEIS Incentive rates are determined with the help of FOB value of exports. Here the FOB stands for Freight on board. MEIS rates varies from products to products in the range of 2% to 5%, for some products it may go up to 7% of FOB value of exports. The incentive in this scheme is availed in the form of license which can be used in waiver of customs duty.
Rebate of state and central taxes and levies – This is also known as RoSCTL Scheme, which allows the exporters to claim the refunds of state and central taxes and levies paid on the goods. RoSCTL is only available to the readymade garments and made-ups. This is also issued in the form of Duty Credit scrip/License.
Service Exports From India Scheme – Also called as SEIS Scheme this is launched by the Government to provide the incentive of 3% to 7% on net foreign exchange earned on notified services which are given under foreign trade policy.
Benefits in above schemes are given in the form of saleable duty credit scrip which can be sold in open market or if license holder has the import then it can be used for the payments of customs duty.
The Documents shall require in above schemes are as follows –
- Digital signature certificate
- Valid copy of RCMC
- Shipping bills/ Invoice in case of service exports
MEIS scheme is not as per the guidelines of the World Trade Organization (WTO) hence Government has approved the withdrawal of MEIS scheme and it has been replaced by the RoDTEP scheme in a phased manner, This scheme will reimburse all the duties and taxes on the export products.
Introduction of RoDTEP and RoSCTL scheme is the reaction of India due to global pressure to discontinue India’s existing scheme, RoDTEP Scheme may come in effect from the 1st April 2021 and will be in effect till 2025.